Policy Documents

Glass-Steagall and the Volcker Rule

Shadow Financial Regulatory Committee –
December 10, 2012

The Committee does not believe that Glass-Steagall should be reinstated, and sees no persuasive rationale for the Volcker Rule. The 1999 partial "repeal" of Glass-Steagall in the Gramm- Leach-Bliley Act (GLBA) eliminated some restrictions on the ability of bank holding companies (BHCs) —but not insured banks—to engage in underwriting and dealing in securities. Although this also can be seen by some as permitting BHCs to take greater risks through securities activities, it had little if any effect on the problems banks and BHCs encountered in the 2008 financial crisis.