Issues Related to Repeal of the Glass-Steagall Act

T-GGD-88-9: Published: Feb 10, 1988. Publicly Released: Feb 10, 1988.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GAO discussed issues related to the repeal of the Glass-Steagall Act. GAO found that: (1) the banking and securities industries now offer similar products and have expanded their activities due to electronics, communications, and regulatory changes; (2) there is no legal or regulatory structure reflecting the realities of today's financial marketplace; (3) if Congress repeals the act, the present mechanism for preserving the banking system's soundness and protecting consumer interests will no longer exist; (4) both industries would need to maintain a level of capital sufficient to support losses resulting from expanded activities; (5) the bank holding structure is the logical entity to organize banking and securities activities, with the Federal Reserve System providing comprehensive oversight; (6) holding companies should maintain sufficient levels of capital to support their commercial banking units, since it would not be appropriate to extend lender-of-last-resort services to the nonbank parts of a holding company; and (7) expanded banking powers could hinder regulators' ability to oversee bank safety and soundness. GAO believes that Congress may wish to phase in Glass-Steagall modernizations in order to develop the resources to oversee the industries.

Oct 25, 2017

Sep 25, 2017

Jun 30, 2017

Jun 29, 2017

Jun 15, 2017

May 31, 2017

May 4, 2017

Apr 26, 2017

Apr 25, 2017

Looking for more? Browse all our products here