Deregulation

The Glass-Steagall Act of 1933 was the first major attempt at regulating the financial industry. The Act was passed by President Roosevelt with the objective of restoring public confidence in the banking system. Glass-Steagall sought to, among other things "prevent the undue diversion of funds into speculative operations," in response to the market crashes that had sparked the Great Depression (Maues, 2013). The reason for this was simple -- speculation was always a temptation for the banking industry, and if left unchecked the industry was likely to indulge in more speculation than the financial industry could sustain while performing at a high level of health and public confidence.

It has been argued that Glass-Steagall, for decades, had been able to prevent the type of accumulation in speculative assets within the banking system that occurred in the 2000s. Commercial and investment banking had been separated for this time, which meant...
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