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The Long and Bumpy Road to Glass‐Steagall Reform: A Historical and Evolutionary Analysis of Banking Legislation
Author(s) -
Hendrickson Jill M.
Publication year - 2001
Publication title -
american journal of economics and sociology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.199
H-Index - 38
eISSN - 1536-7150
pISSN - 0002-9246
DOI - 10.1111/1536-7150.00126
Subject(s) - legislation , repeal , legislature , interest group , politics , regulatory reform , investment banking , market economy , economics , investment (military) , public interest , interest rate , business , economic policy , financial system , finance , law , political science
This paper focuses on understanding the role of interest groups and markets in influencing regulatory change. To that end, it first identifies the interest groups surrounding the creation of legislation that separated commercial and investment banking in the 1930s and then identifies the interest groups involved in the more recent attempts to repeal the separation. Careful attention is also given to developments in the private market that affect the legislative process. This then becomes the case study for understanding how interest groups and market developments are able to influence regulatory policy. This particular case study finds that existing orthodox economic and political science literature gives too much credit to interest groups and not enough credit to private market developments when analyzing policy development and reform.