Separating investment and high street banks


#1

I found this interesting:
www3.u.tv/BusinessNews/index.asp … 03/01/2009

I think this is a good point. There is a huge conflict of interests between the average saver who puts a few thousand pounds or dollars in a savings account for a rainy day, who wants security of their cash as a major priority, and the attitudes taken by the investment banks, with highly ss;eculative investments, usually overseas, and in complex financial instruments that are totally removed from how people think their savings are being invested.
Is he right? or is this a knee-jerk reaction to the a few bad decisions by a few crazy fund managers?


#2

The US did something like this during the Great Depression in 1933 with the Glass-Steagall Act, seperating commercial banks from investment banks, but the act was weakened in the 80s and then finally repealed in 1999. The main argument for repealing the act seems to have been that US banks were losing their competitive edge, especially against foreign banks which didn’t have these regulations.

Something like a Glass-Steagall Act for the UK would probably only be possible, though, if it were not just the UK enacting it, but if the major world governments met and all agreed to seperate their banks along the same lines.


#3

Interesting. I wonder if there will be pressure to reinstate the act in the US now?


#4

One of the interesting facts about the financial crisis here in Australia is that genuine building societies and credit unions have become extremely popular due to their conservative banking practices.


#5

Unfortunately all our building societies wanted to be banks, there really aren’t any places that are safer here except those banks now taken over by the government :frowning:


#6

(Vaguely) on the plus side, most of the building societies turned banks haven’t faired well. Northen rock/bradford and bingly/halifax are now government or resued by other banks. Hopefully, this will deture any want-to-be-banks, and the building societies will become the safe option.


#7

hope the things improve by next year and we get a sigh of relief