A Global Structural Regulation of Financial Institutions

Abstract

This Article reviews the historical background of the Glass-Steagall Act of 1933

along with the developments in the markets that led to the Gramm-Leach-Bliley Act of 1999. It analyzes the discussions on the Volcker Rule in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 from a comparative perspective.

It shows how the reform in the United States may impact financial institutions and markets in other jurisdictions. Germany and Switzerland, where universal banking is the hallmark of the financial services industry, are the primary jurisdictions of interest. After taking a historical and political look at the regulation of financial institutions in the United States and Europe, this Article touches on the issues of global regulatory reform to see if the global solution might fit into the structural issues of financial institutions and systems. It predicts transatlantic onvergence in the financial system and structure of banking business preceded by convergence in the practices and strategies of financial institutions in the United States and Europe.