- repeal the 1933 Glass-Steagall Act and reform the 1956 Bank Holding Company Act,
- allow banks to structure their new activities through operating subsidiaries or affiliates,
- reduce the "moral hazard" of federal deposit insurance by mimicking private bond covenants, and
- not raise any new regulatory barriers.
Bank Regulation: Will Regulators Catch Up with the Market?
Contributing Organization(s): Cato Institute
Author(s)/Creator(s): Randall S. Kroszner
Publishing Date: 1999-03-12
Issue Areas: Government Reform; Economic Development
Ownership/Rights Info: Copyright 1999The Cato Institute. All rights reserved.
File info: 26 pages; 79.31 KB file size
Access Note: This research is also available to order in hard-copy for a cost.
Legislation on financial services modernization has taken on special urgency since the banking industry is transforming itself through mergers stretching across financial services and across countries. Phil Gramm (R-Tex.), the new chairman of the Senate Banking Committee, has made bank regulatory reform his "number-one priority." A review of historical and contemporary evidence shows how market forces can address concerns about consumer protection and the soundness of the financial system. The financial services modernization legislation thus should
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Intended Audience: Legislators/Legislative Aids; Policy Professionals
Type/Format: Policy Brief; Whitepaper
Language code: English
Type/Format: Policy Brief; Whitepaper
Language code: English
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