Matt’s not the only one who remembers the dark day when Gramm/Leach/Bliley became law an unshackled the people who later wrecked the economy while walking away rich and free.
As he notes, a little-noticed provision allowing commercial banks to engage in “complementary to a financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally” has had far-reaching effects as the bankers tended to embrace the first half and ignore the second. Worse, no one seems to know how to define what “complementary to a financial activity” means, which would lead to limits on that activity and a measure of control. Right now, we have neither. The phrase is not so deep as a well or wide as a church door, but has been enough and t`will serve to expand the wealth and power of big financial insitutions.
Matt published a new piece this past week which, in the context of his other work, should be considered essential reading.
The crisis is not yet over, and a second wave may yet roll over us.