More controversy over banking deregulation

The man who was one of the chief architects of the “Big Bank” model now says says the United States never should have repealed the Glass-Steagall banking act in 1999.  He spells out the two biggest flaws:

1. Big banks aren’t more efficient.

His exact wording is: “One was the belief that combining all types of finance into one institution would drive costs down — and the larger the institution the more efficient it would be. We now know that there are very few cost efficiencies that come from the merger of functions — indeed, there may be none at all.”

2. Big banks have bad cultures.

“The second thing we were wrong about has to do with culture — and this turns out to be very serious. Mixing incompatible cultures is a problem all by itself. It makes the entire finance industry more fragile,” he wrote.

But many — including Bill and Hillary Clinton — are pushing back against the notion that the repeal of Glass-Steagall caused the crisis or made the financial system worse.

http://www.4029tv.com/money/former-citigroup-ceo-big-banks-dont-work/36406368

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