Could the 1933 Glass-Steagall Act Have Prevented the Financial Crisis?

18 Pages Posted: 13 Jan 2021

Date Written: October 25, 2020

Abstract

This paper explores the common argument according to which the repeal of the Glass-Steagall Act was at the origin of the 2008 financial crisis. By arguing successively that the Act would not have covered the failing banks and that it would not have solved the “Too-big-to-fail” problem, this paper concludes by the negative. Had the Glass-Steagall act still been in place, the global Financial crisis would not have been prevented. Mortgage policies, low capital requirements, and Basel II seem to be more convincing alternatives.

Keywords: Financial Regulation, Glass-Steagall, Act Financial Crisis, Financial Conglomerates, Universal Banking, Financial Sector Reform, Financial Architecture, Financial Stability

JEL Classification: E50, G20, G32, G34, G38, L13

Suggested Citation

Delabarre, Maxime, Could the 1933 Glass-Steagall Act Have Prevented the Financial Crisis? (October 25, 2020). Available at SSRN: https://ssrn.com/abstract=3726739 or http://dx.doi.org/10.2139/ssrn.3726739

Maxime Delabarre (Contact Author)

Sciences Po ( email )

27 rue Saint-Guillaume
Paris Cedex 07, 75337
France

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