ABSTRACT
In the aftermath of the mortgage lending debacle of 2007, which generated a recession for the US and world economies, former US Treasury Secretary Paul Volcker urged the restoration into banking regulations of the Glass-Steagall Act. This Act, initially passed in the aftermath of the Great Depression, prohibited the financial organizations in the US from engaging in both investment and commercial banking. Subsequent to its repeal in 1999, large mergers occurred and major banks in the US, such as J.P. Morgan Chase, and Bank of America (now including what had previously been Merrill Lynch), and Citibank expanded their business portfolios to encompass derivatives, commercial loans, and mortgage and consumer banking. The irony of these banks appearing to spend some of their government’s “bailout” money for lobbying against the passage and enforcement of new banking regulations, occurring alongside Volcker’s urging that the Glass-Steagall Act and its earlier restrictions on such expansions be reinstituted, has not gone unnoticed.
