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Can a return to Glass-Steagall provide financial stability in the US financial system?


  • Jan Kregel

    () (Levy Economics Institute of Bard College)


In the immediate aftermath of the current financial crisis in the United States the response has been to resolve small and medium size banks, while large banks experiencing financial trouble have been given both direct and indirect government support. This, however, has resulted in a number of larger banks absorbing smaller ones, creating an even smaller number of even larger banks that dominate the financial system. This article deals first with a comparison of the problems created by "too big to fail" financial institutions. The second section deals with the possible restoration of Glass-Steagall type legislation as a means of restoring single-function financial institutions. It concludes that alternatives to separation of functions will have to be found to deal with multifunction financial institutions since most lending activity requires securities markets activities.

Suggested Citation

  • Jan Kregel, 2010. "Can a return to Glass-Steagall provide financial stability in the US financial system?," PSL Quarterly Review, Economia civile, vol. 63(252), pages 39-76.
  • Handle: RePEc:psl:pslqrr:2010:13

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    References listed on IDEAS

    1. Alessandro Roncaglia, 2009. "Rule, instability and crisis," PSL Quarterly Review, Economia civile, vol. 62(248-251), pages 3-13.
    2. Michele Fratianni & Francesco Marchionne, 2010. "The Banking Bailout of the Subprime Crisis: Size and Effects," PSL Quarterly Review, Economia civile, vol. 63(254), pages 187-233.
    3. Stefano Fenoaltea, 2010. "The reconstruction of historical national accounts: the case of Italy," PSL Quarterly Review, Economia civile, vol. 63(252), pages 77-96.
    4. Amirhossein Najafi & Anwar Aridi & Hossein Askari, 2010. "Do Better Political Relations with the USA Improve A Country's Economic Outlook?," PSL Quarterly Review, Economia civile, vol. 63(255), pages 379-397.
    5. Mario Sarcinelli, 2009. "La vigilanza sul sistema finanziario: obiettivi, assetti e approcci," Moneta e Credito, Economia civile, vol. 62(245-248), pages 145-190.
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    More about this item


    Financial Crisis; Instability; Rules; Banking System;

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • G01 - Financial Economics - - General - - - Financial Crises
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • F30 - International Economics - - International Finance - - - General
    • N22 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: 1913-


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