Many people, both financial professionals and commentators, have blamed the adoption of the Gramm-Leach-Bliley Act in 1999, which repealed the restrictions on affiliation between commercial and investment banks in the Glass-Steagall Act of 1933, as an important, if not primary cause of the financial meltdown of 2008-09. Others suggest that these restrictions and separations should be restored. Still others say that the restrictions had been significantly watered down before the repeal anyway. In any case, Bill Clinton signed the bill, and I recently came across the following quote attributed to him by Forbes magazine in 2008, which I thought was interesting:
“Phil Gramm and I disagreed on a lot of things, but he can’t possibly be wrong about everything. On the Glass-Steagall thing, if you could demonstrate to me that it was a mistake, I’d be glad to look at the evidence. But I can’t blame the Republicans. This wasn’t something they forced me into.”