Glass-Steagall required banks to choose between becoming a commercial bank or an investment bank. They could choose either, but not both. This prevented commercial banks from using or acquiring portfolios, which could put depositors and savings accounts at risk. From 1933 to 1999, banks lobbied Congress to pass bills relaxing restrictions contained in the GSA. (Actually, 45 separate bank bills were passed during this period.) In 1999, Congress passed the Financial Services Modernization Act (Gramm-Leach-Bliley Act or GLBA). This bill removed the risk barriers between commercial and investment banks that Glass-Stegall had instituted.
So we are back to combining both low-risk and high-risk portfolios under the management of a single entity, not vastly different than in 1929. GLBA has already caused some major financial difficulties this century including the Great Recession of 2007-2008 and the 2023 bankruptcy of Silicon Valley Bank, the 16th-largest US bank.
After 100 years, is the stock market more stable, visible, or trustworthy? I will bet on the crafty underwriters bringing new financial products to market and not on the average investor that purchases them.
That last question is very applicable to the situation of today’s stock market. To tell the truth, I would not trust any of them, the companies, the statistics from the companies, the SEC, the banks or the venture capitalists, not to speak of the brokers and floor traders. Not a one of them. The gamit runs from front running to non-enforcement through the misrepresentation of the details of the company. Can 1929 happen again? Yes, and the way things are set up now, I would bet on it happening soon.
floor brokersand the office brokers. There is all sorts of crap going on to make sure that those in NYC make the money and everybody else can go hang! Why do you think there is such a huge division between Main Street and Wall Street?