Gramm Leach Bliley Act of 1999

Executive Summary

• The Gramm Leach Bliley Act was designed for investment banks to become commercial banks.

Introduction

Allow private investment banks to enter virtually any type of business under a “complementary business provision.”

This is explained in the following quotation.

“For nearly a decade, this obscure provision of Gramm-Leach-Bliley effectively applied to nobody. Then, in the third week of September 2008, while the economy was imploding after the collapses of Lehman and AIG, two of America’s biggest investment banks, Goldman Sachs and Morgan Stanley, found themselves in desperate need of emergency financing. So late on a Sunday night, on September 21st, to be exact, the two banks announced they had applied to the Federal Reserve to become bank holding companies, which would give them lifesaving access to emergency cash from the Fed’s discount window.

The Fed granted the requests overnight. The move saved the bacon of both firms, and it had one additional benefit: It made Goldman and Morgan Stanley, which both had significant commodity-trading operations prior to 1997, the first and last two companies to qualify for the grandfather exemption of the Gramm-Leach-Bliley Act. “Kind of convenient, isn’t it?” says one congressional aide. “It’s almost like the law was written specifically for them.”” – Matt Taibbi

Source: Matt Stoller

https://mattstoller.substack.com/p/is-biden-accidentally-giving-the/