Advanced English Dialogue for Business – Glass steagall act

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Caroline: It’s interesting how the Glass-Steagall Act was repealed in 1999 with the Gramm-Leach-Bliley Act.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.