Mon, Feb 20, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Obama Bank’s plan revives Glass Steagall Act, may improve capital raising environment for hedge funds

Monday, January 25, 2010

This article was written by Bryan Goh, First Avenue Partners LLP, London :

It sounds like a plan. President Obama in an effort to address what is widely believed to be a flawed banking model has decided to ressurrect the Glass Steagall Act 1933.

Glass Steagall 1932 had already been effectively revived, extended and implemented in 2008 as the Fed rode to the rescue of a banking system on the verge of collapse. It is perhaps ironic that a year prior to the crisis of 2008 Hank Paulson was in China extolling the benefits of a market economy. A year later banks are being de facto nationalized in the Western world. It is worth pointing out that Chinese banking regulation maintains a Glass Steagall type separation between commercial and investment banks even today.

Obama's plan stops short of calling for a reinstatement of Glass Steagall. Instead "banks will no longer be allowed to own, invest, or sponsor hedge funds, private equity funds or proprietary trading operations for their own profit, unrelated to serving their customers,” The plan has the fingerprints of ex Fed Chairman Volcker, it is being informally referred to as the Volcker Rule. Larry Summers on the other hand has pointed out that the victims and perpetrators of the crisis had been investment banks and insurance companies which would not have been impacted by Glass Steagall in the first place.

Great plans are often precipitated by great crises (Glass Steagall itself was enacted in the wa......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. With $54bn in assets, Philippines is ready for hedge funds, alternative investment products[more]

    Komfie Manalo, Opalesque Asia: With the country's outstanding fund management industry at $54bn and growing, the Philippine market and its investors are ready to invest in "more sophisticated" asset management products, like hedge funds and alternative investments, said Deanno J. Basas, presi

  2. SoftBank to buy Fortress Investment for $3.3bn[more]

    From Reuters.com: Japan's SoftBank Group Corp on Wednesday said it has agreed to buy Fortress Investment Group LLC for about $3.3 billion, looking to add investment expertise as it prepares to launch the world's largest private equity fund. The all-cash deal is SoftBank's first major investmen

  3. ...And Finally - Truth in advertising[more]

    From Newsoftheweird.com: Girl Scout Charlotte McCourt, 11, of South Orange, New Jersey, saw her sales zoom recently when she posted "brutally honest" reviews of the Scouts' cookies she was selling -- giving none of them a "10" and labeling some with dour descriptions. She was hoping to sell

  4. Europe - Brexit - Updated legal guide, Euro exchange rates set to tumble as hedge fund's super computer predicts Marine Le Pen will be next French president, Swiss fund market hits all-time high[more]

    Brexit - Updated legal guide From Herbertsmithfreehills.com: When we began analysing in depth the possibility of Britain exiting the EU (Brexit), 18 months prior to the June 2016 referendum, the business consensus was very much that Brexit was a remote prospect that either would never hap

  5. People - Gramercy appoints Bradshaw McKee as managing director of Capital Solutions, Trump taps Cerberus's Feinberg to lead intelligence review[more]

    Gramercy appoints Bradshaw McKee as managing director of Capital Solutions Gramercy Funds Management LLC, a $5.8 billion dedicated emerging markets investment manager, today announced the appointment of Bradshaw McKee to the position of Managing Director, Capital Solutions and Distressed