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Observations and musings on Jacksonville Politics

Jacksonville’s Expert on the Banking Crisis

The St. Pete Times highlighted the long-forgotten actions of Jacksonville’s own—US Senator Duncan Fletcher.  Many historians say that Sen. Fletcher was one of the most prominent Floridians of the last century, yet few Floridians today know much about him at all.  As it turns out, perhaps the whole country would benefit from becoming better acquainted with his work in the Senate.

Chairing the investigation was a Floridian, Jacksonville Sen. Duncan Fletcher, whose name today is largely lost in history. But his probe of the freewheeling financial era that crashed with the Great Depression spanned two years, filled 11,000 pages of testimony and spawned many of the nation’s banking regulations still in place.

The Glass-Steagall Act of 1933 grew out of Fletcher’s hearings, separating commercial banks from investment houses. Bank deposits became federally insured, protecting Americans’ nest eggs, while the Securities Exchange Act of 1934 also tightened Wall Street regulation.

Glass-Steagall endured until Congress in 1999 bowed to pressure from the banking industry and repealed the measure. Many critics now blame the repeal for sparking the current global crisis, since risky investments and subprime lending flourished in the newly deregulated climate.

Keep reading here.

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