Icelandic lawmakers are pushing legislation to force banks to split up their business – separating commercial banking practices from risky investment banking practices. That’s similar to what the Glass-Steagall Act of 1933 did in this country – creating an unprecedented 5 decades of economic growth without a serious financial crash.
That act was officially repealed in 1999, setting up the financial disaster of 20-07 and 20-08. If Iceland succeeds in breaking up its big banks, then according to Bloomberg News, it will be the first western nation since the global economic crisis to take these necessary steps to turn banking back into the boring, useful, and safe industry it used to be. Let’s hope policy makers in the United States are paying attention.