. The muddle [of Dodd-Frank] stands in sharp contrast to the aftermath of earlier legislation. The banking-reform act of 1864 consolidated America’s fragmented currency system and enabled Abraham Lincoln to finance the civil war. The period of reregulation between 1933 and 1940 reserved a safe harbour for commercial banks, which were backed by federal deposit insurance but didn’t attract speculative capital because of caps on the rate of interest that could be paid. Risk was left to investment banks and asset-management firms, tempered by abundant requirements for disclosure and a shift in where the burden of proof lay in litigation, from plaintiffs to defendants. Even Dodd-Frank’s creators can bring no similar clarity to its intentions.Sounds like nostalgia to me.
Friday, February 17, 2012
Did I Just Hear The Economist
Come out for a Return to Glass-Steagall?
diatribe against briefing paper on Dodd-Frank: