Jenice Malecki of Malecki Law will be appearing on Fox Business News tonight, March 26, 2013 between 6pm and 7pm.
Ms. Malecki will be appearing on The Willis Report to discuss the recent Rasmussen Reports that indicate 50 percent of Americans want the government to break up the country’s big banks. The report also found that only 23 percent of Americans oppose such a breakup, with 27 percent remaining undecided.
Critics have said that the size of several US banks are a threat to the country’s economy. This notion became widely known during the recent recession as “Too Big To Fail.” The US Attorney General recently made a shocking revelation that some banks are even too large to even prosecute effectively.
Banks in this country have not always been as large as we have seen in recent years. Much of the growth in these banks has not necessarily been organic, but rather is the result of massive mergers and acquisitions between several banks.
In fact, shortly following the Great Depression, Congress passed the Banking Act of 1933, widely referred to as the Glass-Steagall Act, which contained four provisions that significantly limited the affiliations between commercial banks and securities firms. This act made mergers between commercial banks and investment banks very difficult, if not impossible.
However, over the 60+ years this act was in effect, its restrictions were gradually eroded. In 1999, the Glass-Steagall restrictions on banks were repealed under the Gramm-Leach-Bliley Act, and then-President Clinton publically announced that “the Glass-Steagall law is no longer appropriate.”
The repeal of Glass- Steagall opened up the door for massive mergers between commercial and investment banks such as JP Morgan and Chase Bank, effectively changing the banking landscape in the United States.