HONOLULU (HawaiiNewsNow) -
The Fed has ordered America's megabanks to keep more cash on hand in case of panic. They have until 2019 to do it, so let's hope there's no panic for the next 14 years.
Wall Street bankers hate this because we're talking about billions they can't invest. But you should love it because it's responsible, and the banks will still make billions.
Lack of rules like this contributed to the Great Depression. That led to the Glass-Steagall Act, which among other things forbade banks to invest in competition with depositors' money. By the end of the 20th century bankers convinced Congress to ease those restrictions, a decision that led directly to the market crash of 2008. The Dodd-Frank law, which brought back SOME restrictions, is five years old today.
A complete ban on banks having investment arms would make banking safer AND lead to their spinning off their investment divisions, effectively breaking up the megabanks so they're no longer too big to fail. It would make the biggest banks behave as responsibly as community banks do.
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