>>4232453 (PB)

The Glass-Steagall Act; I was privileged to work for a regional brokerage in Minneapolis, licensed as a broker and employed as assistant to one of the Sr. VP's. He was VERY active in trying to convince Congress NOT to deregulate, traveling to Washington numerous times to testify against removal of the separation of commercial and investment banking.

Aside from regulations, there's a very good and usually overlooked reason for that separation, and it has to do with the mindset of the principals involved. Commercial banks are for preservation of capital, and a good banker is risk-averse, protecting the funds and investments of their customers. An investment banker, if they are good, are by nature gamblers . . . they are comfortable with higher risks, and while there is a percentage of customer investments that may be maintained in conservative instruments, the majority of the funds that move through are going to be in higher-risk securities - from relatively conservative stocks and bonds in utilities or municipalities, to puts and calls in the options market and futures trading in commodities.

Even at that time, banks who tried to get into credit cards lost money - until they hired people who were experienced in that credit market. Placing people with a gambler's mentality in charge of commercial banking is a losing proposition - and the conservative mindset of a commercial banker is not going to do well in investment banking! Yet now the banking industry has tried to commingle both forms of banking - to the detriment of both!