Listen to a Business English Dialogue About Glass steagall act
Caroline: Hey Howard, have you ever heard of the Glass-Steagall Act in business and finance?
Howard: Yes, Caroline. The Glass-Steagall Act was a law passed in 1933 that separated commercial banking activities from investment banking activities.
Caroline: Right, it aimed to prevent conflicts of interest and protect against risky practices that contributed to the Great Depression.
Howard: Exactly, it prohibited banks from engaging in activities like securities trading and underwriting.
Caroline: It’s interesting how the Glass-Steagall Act was repealed in 1999 with the Gramm-Leach-Bliley Act.
Howard: Yes, the repeal allowed for the consolidation of the banking industry and paved the way for the rise of financial conglomerates.
Caroline: And some argue that the repeal contributed to the 2008 financial crisis by allowing banks to take on excessive risk.
Howard: Right, critics argue that the repeal led to a lack of oversight and increased systemic risk in the financial system.
Caroline: It’s important to consider the impact of regulatory changes on the stability and integrity of the financial system.
Howard: Absolutely, regulatory frameworks play a crucial role in safeguarding against financial instability and protecting consumers.
Caroline: And discussions about reinstating certain provisions of the Glass-Steagall Act continue to be debated today.
Howard: Yes, policymakers are considering ways to address the lessons learned from past financial crises and strengthen financial regulations.