- “The Repeal of the Glass-Steagall Act: Myth and Reality,” by Oonagh McDonald
- “New York’s Bank: The National Monetary Commission and the Founding of the Fed,” by George Selgin
Trump’s challenge will be to reduce regime uncertainty, and also introduce tax and regulatory policies that encourage private investment.
What blemishes there were didn’t imply any market failure, or a need for more government regulation, for the simple reason that “imperfect” doesn’t mean “inefficient.”
While it is extremely rare for one part of the government to file a brief in opposition to another part, it is not entirely surprising in this case.
The public needs to see the Fed’s arguments for maintaining its present, boated balance sheet for what they are: mere excuses.
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By James A. Dorn. Working Paper No. 42. February 14, 2017.
By Matthieu Chavaz and Andrew K. Rose. Research Briefs in Economic Policy No. 67. January 11, 2017.
By Charles Calomiris and Matthew S. Jaremski. Research Briefs in Economic Policy No. 66. December 21, 2016.
By Erica Myers. Research Briefs in Economic Policy No. 64. November 23, 2016.
The Glass-Steagall Act was enacted in 1933 in response to banking crises in the 1920s and early 1930s. It imposed the separation of commercial and investment banking. In 1999, Glass-Steagall was partially repealed by the Gramm-Leach-Bliley Act. When the United States suffered a severe financial crisis less than a decade later, some leapt to the conclusion that this repeal was at least partly to blame. In a new study, international financial regulatory expert Oonagh McDonald argues that the notion that repealing Glass-Steagall caused the financial crisis, and that bringing it back would prevent future crises, is not supported by the facts.
The Cato Institute’s Center for Monetary and Financial Alternatives is pleased to announce another installment of its “live” edition of EconTalk. Join Russ Roberts as he interviews David Beckworth on the part that the Federal Reserve and other central banks played (and the part they ought to have played) in the Great Recession.
The lack of any monetary rule to guide policy decisions has created great uncertainty and increased financial volatility. Zero or negative interest rates and quantitative easing have created severe distortions in asset markets by increasing risk taking and politicizing credit allocation while failing to bring about robust economic growth. At Cato’s annual monetary conference, leading experts addressed the risks inherent in the unconventional monetary policies of the world’s leading central banks and the steps that need to be taken to restore long-run economic growth.
In a new paper, Cato scholar George Selgin reviews the origins, organization, and shortcomings of the National Monetary Commission, convened over a century ago, in order to suggest how a new Centennial Monetary Commission might improve upon it.