Part 4/15:
Both participants delve into the evolution of banking regulation, particularly highlighting the significance of the Glass-Steagall Act (1933). Peter notes how its repeal in 1999 allowed banks to consolidate and engage in riskier behaviors, contributing to the 2008 financial meltdown.
He recalls how laws like Regulation Q in the mid-20th century limited bank competition by restricting interest paid on deposits—preventing banks from monopolizing all sources of capital and thus curbing dangerous speculative activities. The deregulation movement gradually dismantled these safeguards, leading to the rise of ‘big banks’ and the concentration of financial power.