Chapter

Background Considerations to a Re‐Regulation of the US Financial System: Third Time a Charm? Or Strike Three?

Jan Kregel

in Time for a Visible Hand

Published in print January 2010 | ISBN: 9780199578801
Published online February 2010 | e-ISBN: 9780191723285 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199578801.003.0004

Series: Initiative for Policy Dialogue

Background Considerations to a Re‐Regulation of the US Financial System: Third Time a Charm? Or Strike Three?

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Kregel's chapter notes that the United States financial system is currently undergoing its third episode of major financial turmoil and response in the form of financial re‐regulation. The first was the creation of the national bank system in the 1860s, the second was the New Deal legislation of the 1930s, and the third is that currently under way. The first two episodes produced similar responses and similar financial structures, and laid the basis for subsequent crises. Given the similarity of the present crisis with the two previous experiences, there is, therefore, the risk that the solutions introduced will in fact lay the groundwork for the next crisis.

Keywords: prudential regulation; separation of commercial and investment banks; history of crises

Chapter.  5961 words. 

Subjects: Macroeconomics and Monetary Economics

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