US prepares to ease bank rule
Known for his commentary on international relations and US politics, Rupert Cornwell also contributes obituaries and occasionally even a column for the sports pages. With The Independent since its launch in 1986, he was the paper's first Moscow correspondent - covering the collapse of the Soviet Union – during which time he won two British Press Awards. Previously a foreign correspondent for the Financial Times and Reuters, he has also been a diplomatic correspondent, leader writer and columnist, and has served as Washington bureau editor. In 1983 he published God's Banker, about Roberto Calvi, the Italian banker found hanging from Blackfriars Bridge.
Tuesday 28 February 1995
Under the plan, sketched out yesterday by Robert Rubin, the Treasury Secretary, the Glass-Steagall Act which has separated commercial and investment banking since 1935, would be repealed. The aministration is also calling for an overhaul of the 1956 Bank Holding Company Act, so that banks and insurance companies can belong to the same financial group.
Hitherto, every effort by Congress to overturn Glass-Steagall has foundered on the dogged opposition of small banks, and the intractable hostility of Democratic committee chairmen. But last November's Republican takeover has changed things. Mr Rubin's blueprint has enough support in both Senate and Congress, even opponents of reform concede, that some kind of reform is bound to pass.
Today's strict regulations stem from the belief that rampant stock market speculation caused the banking collapse that ushered in the Great Depression.
Accordingly, only a bank or a bank holding company may own another bank. Some restrictions have been lifted in recent years - notably to allow banks to operate outside their home states and to run stock trading business - but the US financial sector is still fragmented and inefficient.
The Administration argues that by allowing banks, securities firms and insurance companies to join forces, artificial barriers would be removed and consumers would benefit through lower costs.
Mr Rubin maintains that by having different agencies regulate separate divisions (the Federal Reserve and the Comptroller of the Currency for banks, while the SEC would continue to oversee securities trading) "firewalls" would be created to reduce the risk of Federal bailouts for a crisis- hit group.
The Rubin plan falls midway between the two Republican versions on Capitol Hill: more ambitious than the draft House bill of Jim Leach, banking committee chairman, which would permit links between banks and securities firms, but stopping well short of the Senate banking committee blueprint, which would allow banks to own, and be owned by, even companies outside the financial sector.
- 1 Man on naked bike ride gets ejected after becoming aroused
- 2 Fifa corruption: Europe plots to stage an 'alternative World Cup' in place of Russia 2018
- 3 How much sex should I be having?
- 4 Jaden Smith wears gender fluid dress to high school prom with Hunger Games actress
- 5 Betting company 'refuse to pay' after student wins £1,000 from 50p bet on Roger Federer
Caitlyn Jenner, formerly Bruce Jenner, reveals new look on Annie Leibovitz shot Vanity Fair cover
Russian military jets and US destroyer clash in Black Sea 'posing danger to stability'
Ed Miliband returns to the backbenches but it's all a bit awkward as he tries to avoid eye-contact with fellow Labour MPs
Photographer who performed naked shoot in China's Forbidden City sparks outrage
Man on naked bike ride gets ejected after becoming aroused
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Why this year's general election was the most unfair in Britain's history
iJobs Money & Business
£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...
£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...
£25 - £30K: Guru Careers: We are seeking a highly-motivated and ambitious Comm...
£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...