We should all stop for a moment and give thanks to the people who caused the financial meltdown of the 21st century. The Gramm–Leach–Bliley Act (GLB), also known as the Financial Services Modernization Act of 1999, was enacted November 12, 1999. This legislation repealed the Glass–Steagall Act of 1933, and now ten years plus later, it is widely known that this was a total failure.
President Bill Clinton has admitted he was wrong in a video finally, after doing a bit of stumbling in the beginning. It was on Clinton’s watch that Citicorp violated the rules. From Wikipedia:
A year before the law was passed, Citicorp, a commercial bank holding company, merged with the insurance company Travelers Group in 1998 to form the conglomerate Citigroup, a corporation combining banking, securities and insurance services under a house of brands that included Citibank, Smith Barney, Primerica, and Travelers. Because this merger was a violation of the Glass–Steagall Act and the Bank Holding Company Act of 1956, the Federal Reserve gave Citigroup a temporary waiver in September 1998.
On July 25, 2012, former Citigroup Chairman and CEO Sandy Weill, considered one of the driving forces behind the considerable financial deregulation and “mega-mergers” of the 1990s, surprised financial analysts in Europe and North American by “calling for splitting up the commercial banks from the investment banks. In effect, he says: bring back the Glass-Steagall Act of 1933 which led to half a century, free of financial crises.
Arthur Levitt, Chairman of the SEC under Clinton, was criticized for not pushing for tougher accounting rules. Since May 2001, he has been employed as a senior adviser at the Carlyle Group, of which the Bush family is a part of.
