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To: RayChuang88

I would add one more issue to your point:

G-S 1933 also put a firewall between banking and insurance.

Now we have an insurance company (eg, AIG) getting into the banking sector through unregulated derivatives, and in effect, exposing the assets of an insurance company to the banking sector, which is exposed to the markets in the ways which you detail. In effect, all the firewalls are gone.

We need to stovepipe the investment banks, commercial banks and insurance companies to prevent flash-over from happening again.


8 posted on 11/01/2009 10:15:06 PM PST by NVDave
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To: NVDave
If I were President Obama, I'd put these financial system reforms in place:

1) Reimpose the full aspects of the 1933 Glass-Steagall Act to effectively protect bank assets from the ups and downs of the stock market.
2) Increase the minimum margin requirements for trading in stock and commodity futures from 5% to somewhere between 15% and 20%.
3) Require REAL liquidity backing to trade in derivatives, hedge funds and credit default swaps.
4) Re-write the Sarbanes-Oxley Act to better balance the need for IPO's against better accounting report requirements.

9 posted on 11/01/2009 10:30:45 PM PST by RayChuang88 (FairTax: America's economic cure)
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