I knows lotta work went inta the bank laws an we needs em passed.
But I was jes thinkin on how good ol FDR did it and here's my memory.
Now I knows that thangs have changed a little and even mentioning this old stuff will cause bankers an their water boys, the Grand Auld Guy Rep Party [GAGREP], to puke a lot, but is worth memberin how things were in the 'good ol days' which sum of us even remember today. What follows ain't xactly suited to today, but mebbe can work as guideposts.
Rule was to separate different things inta different banks with an absolute wall so's one type bank couldn't do another bank's business.
Commercial banks - take deposits for checking accounts and make business loans - no loan longer than 10 years - and consumer loans shorter than 5 years. Commercial property loans no longer than 15 years. All loans held by originating bank until paid off. Bank subject to reserve requirements, deposits protected by FDIC. Reserves are cash and T bills only - no BS stocks or derivitaves.
Savings and loans - take savings deposits, issue no checking accounts, and make long term loans only on residential real estate - houses and apartments. Subject to reserve requirements and depositers have FDIC protection. Must retain ownership of each loan for minimum of five years.
Investment banks - make investments; can NOT make loans or issue checking or savings accounts. No reserve requirements, no help.
Surance companies - are not banks. They cannot make loans or issue checking accounts and are NOT protected from stupid decisions. Insurance products are highly regulated.
Y'all wonderin where all the money gonna come from ta make loans since this type rules ties them weasels hands. Well Barry, ya gotta know that they is a LOT of money floatin round. All the money that workin folks don't earn in wages gits cumulated inta them Prince accounts. An them Princes gotta lotta money to make new investments. Won be no trouble ta git the money to start new banks. No trouble at all.
Here's whas good bout them old rules - we, the Good Ol USA, had 50 years of prosperity, zero bank failures and a solid middle class.
Here's whas bad - it's BORING. Them gamblin bank weasels wants excitement and they won be gittin none.
OK, Fine. Let em go to the track and buy fast cars an kill theirselves in a hunnert ways. But, here's da ting: I DON WANNA PAY FOR THAT NO MORE.
Them weasels hate those rules and they'll squirm and burrow and bribe til they gits em changed. We knows that.
But, ever time we breaks down the walls tween these things and let the bank weasels do all type business, they gonna screw us. Seen it before and we'll see it again.
As for me, Ima sick of it.
So Barry - put them weasels on a short leash, if'n you don't they's gonna eat us for lunch and we can kiss the good ol USA bye bye.