Senator Phil Gramm, one of the authors of the Gramm-Leach-Bliley Act, says the legislation passed in 1999 is not responsible for the 2008 financial crisis. Over the years, many have called for the reinstatement of the Glass-Steagall Act, which kept the activities of federally insured banks separate from those of securities firms and insurance companies.
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Gramm says he sees no evidence that breaking up banks will make them any safer or that the 1999 act he co-authored was responsible for the crisis. In a contrary view, Sandy Weill—founder of Citigroup and a supporter of Gramm-Leach-Bliley—called for the breakup of financial holding companies.
Weill said investment banking activities should be separated from banking so that banks do not become too big to fail and place the financial system at risk.
John Reed, a co-founder of Citigroup, and David Komansky, former head of Merrill Lynch & Co., agrees that it was a mistake to repeal Glass-Steagall.
Thomas Bliley, Jr., a co-sponsor of the law that repealed the 1933 act, says that the financial industry had been lobbying to repeal Glass-Steagall since the law was put into place. He was uncertain whether the repeal was a mistake
Gramm added that the government should not have bailed out entities external to banks such as American International Group (AIG). Former US Senator Byron Dorgan says it doesn’t make sense to separate the repeal of Glass-Steagall from the crisis. He voiced in 1999, the year of the repeal, to say the repeal would lead to massive taxpayer bailouts in 10 years.