Should the Glass-Steagall Act be reinstated? Jim Barth, Lowder Eminent Scholar in Finance in the Harbert College of Business, weighed in on the subject during a recent interview with Marketplace, which was broadcast nationally via public radio.
“It was thought that banks should stick to the traditional activities, taking in deposits and making loans to businesses or individuals, and stay away from the stock market,” said Barth, who once served as Chief Economist of the Office of Thrift Supervision, and suggested that such interviews via national airwaves are beneficial publicity for Auburn University.
The Glass-Steagall Act, which forbids commercial banks from engaging in the investment business, was implemented in 1933 and terminated in 1999. Its reinstatement was suggested at the Republican National Convention and is expected to be a subject of debate at the Democratic National Convention.