Why It’s Time to Restore 1930’s Separation of Banking and Gambling
June 19, 2013 — Eighty years ago, on June 16, 1933, President Franklin Roosevelt signed the National Banking Act, also known as “Glass-Steagall,” in reference to Sen. Carter Glass (D-Va.) and Rep. Henry Steagall (D-Ala.). The law socialized deposit insurance, with creation of the Federal Deposit Insurance Corp. In exchange for guaranteeing the deposits of bank customers, Glass-Steagall steered FDIC banks into engaging in socially useful activity, notably making loans to businesses and consumers. Whether Glass-Steagall would have prevented the financial crash of 2008 will be endlessly debated in policy circles, but the case for reinstatement draws widespread and sometimes unexpected support.