Lomu, a liitle history for your elidification.
The Glass Stegal act was enacted in 1932 after the 29 crash to separate commercial banks , ie banks that loan for housing, small business etc. from so called investment banking or IMO straight out gambling, it worked very successfully until a case was put to Clinton in 1997 to repeal the act as this would allow more money to come into house lending and make housing available to more low income people.
Glass and Stegal were opposing congress men at the time (1932). ie one Democrat, one Republican.
After 97 , as low interest rates come into play , bankers realized they could bundle the housing loans into packages and on sell them to the investment banks who then flicked them on to investment groups, as more money came into the banking at retail level, the loans were off their books by this time, the commercial banks chased more lending, this was in the period leading up to 2007/8 ,resulting in the NINJA loans , we all know the end result. The greed of the investment bankers and the traders fuelled this.
The better result would have been as the Govt did in Iceland , bailed out the people and jailed the bankers, unfortunately the "investment bankers/gamblers" have the Govt in the USA by the proverbials . So the seeds were sown in the repeal in 1997.
