The end of separate operation
Wisdom s2
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During the period of 1933- 1963, both commercial banks and investment banks in the United States can abide by the separation provisions of the glass-steagall act. However, since 1963, both commercial banks and investment banks have begun to try to break through the restrictions, and in most cases, their efforts have been supported by judicial decisions.
During the period of 1987, the board of directors of the US Federal Reserve approved bank holding companies such as Citigroup and JPMorgan Chase to engage in underwriting and trading of securities such as commercial bills in the form of "Article 20 affiliated companies", but the income from these businesses shall not exceed 5% of the total income of affiliated companies. Later, the types of securities that can be operated were expanded to all corporate bonds and stocks, and the income ratio was increased to 25%. The Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and state banking regulators have "loosened" commercial banks and allowed their regulators to engage in securities or insurance business.
In fact, before the passage of the 1999 GLB bill, the separate operation system in the United States had disintegrated and joint operation had become a common phenomenon. Large commercial banks in the United States have become typical American-style universal banks, and the GLB Act only legally recognizes the joint operation that has taken place. Among the major developed countries, the United States is the last country to formally abolish the separate operation system in legislation. Prior to this, Japan, South Korea and other countries that implemented separate operations with reference to the United States have abolished the control of separate operations through legislation. Therefore, the adoption of GLB method can be regarded as the end of the separate management system in major countries.