The Gramm-Leach-Bliley Financial Services Modernization Act became law on Nov. 12, 1999 when it was signed by President Clinton (after passing in the House by a 362-57 vote and in the Senate 90-8). Simply put, it repealed the Glass-Steagall Act, opening up competition among commercial banks, investment banks and insurance companies. Previously, commercial banks, investments banks and insurance companies generally were prohibited from combining and entering into each other’s businesses.
This article will continue my annual discussion of Gramm-Leach-Bliley, through its tenth anniversary, but, because of the unfortunate comments of politicians and others pointing to GLB as one of the causes of our current financial services industry crisis, will concentrate on rebutting the various myths and charges that have been levied.
