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Former Governor Frank Keating on whether we should bring back Glass-Steagall act to help fix banks.
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It's it's not just to briefly go back to interview we had yesterday of former senator Ted Kaufman of Delaware.
Which are but the Wall Street protests -- the problems with the banks and He said the Volcker -- is not gonna work well enough so we should consider.
Bringing Glass-Steagall back instead so take a listen to the.
The basic idea once we start to say we're gonna go back to glass steel.
Volcker Rule be off the table all these things should be on and we really have people have the banks back to what the right and you wanna be a commercial bank beer commercial bank.
But at Columbia investment bank being an investment bank.
Talk more about that today Frank Keating a former governor of Oklahoma presidency of the American Bankers Association joins us from DC.
May be what the Wall Street protesters have done dedicated is that they brought that conversation back that we should think about.
A real separation of commercial and investment banking what would be wrong with that.
Well I think those kinds of debates that have taken place over the course of the last several years and will take place again there's no question.
That some reining in of proprietary trading is appropriate Dodd-Frank said that that should be so.
But obviously to the extent that a bank or any institution hedges its risk commodity risk financial risk.
By -- trading proprietary early by represented their clients.
Well and according to what the client wishes the institution in Newport.
Mean those are difficult issues -- -- -- right now is 293.
Pages.
Pulmonary materials 380 footnotes and very very complex there was -- sort -- got -- That was kind of Kaufman's point -- it -- -- -- in some ways is that.
You know He looks that it says that you.
You you basically made nobody happy.
By putting something like the Volcker Rule in place because -- the banks are cannot say this is gonna make us less profitable because we have to hire people essentially to interpret these and and -- regulations before we even.
Change the -- were doing business as to comply with them.
And then the people who on the assessing what we didn't go far enough because you know Morgan Stanley failed tomorrow would they be bailed out you know what yeah they probably would be so why not just go back to the way it was before 1999.
Common politics your -- -- always plant I suspect.
So in the process -- working through these things you're gonna have a lot of conflicts.
A lot of disagreements what I would hope would occur is that men and women and -- congress of both parties.
In goodwill would look at Dodd-Frank can determine what ought to be amended or repealed in the statute that hasn't been.
I've begun yet but I think it -- -- -- started.
And obviously Glass-Steagall will always be a part of the debate because there's no question there are problems but the real problem and as you know the collapse of the Howard housing market was a result.
Other view that everybody -- -- Allison Fannie and Freddie but -- -- and everything no job no documentation no loan no surprise that the whole thing collapsed.
Think it's funny that you're represented of essentially of the banking industry and although you say it's going to be part of the debate yet they're going to come out and say.
Or court order to go the other way and say that the -- that the Glass-Steagall act should a comeback or B not come back why.
Why the non -- nature governor Keating if you don't money putting.
Because you don't know what I'm just saying you don't know what's gonna come out of the debate be a you know it's one thing to say.
That I put on the other and all the ingredients that'll bring out of but wonderful round loaf of bread.
But when you have no clue what the eight ingredients are not sure when ate the bread yet what's your view a lot of the reality is that -- idea saying the reality of the problem go away.
Was -- saying recklessness people who should not a -- houses.
Broad unregulated mortgage brokers all of this thing is what brought down the economy.
I would not imagine a whole lot of problems occurred as a result of proprietary trading.
Those are all issues that ought to be looked at in terms of the safety and soundness of the commercial banking system.
And they should be in the future and they were in the past so we'll see what happens we got nowhere so far Frank Keating thank you for that we'll keep talking about this former governor of Oklahoma of an American.
