A Study on Correlations between the Repeal of the Glass-Steagall Act (GSA) and the Financial Crisis of 2007
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There has been a heated discussion about the repeal of the Glass-Steagall Act (GSA) that caused the financial crisis of 2007. In order to understand whether the repeal of the GSA caused the financial crisis of 2007, this paper will analyse how the repeal of the GSA influenced commercial banking and investment banking activities, the complexity of new financial products and other institutions. In addition, this paper will investigate how the crisis was influenced by the three factors. The role of GSA’s repeal in the crisis will be discussed as well. This paper will argue that the repeal of the GSA was a trigger in the crisis.
Glass-steagall act, Financial crisis, The financial crisis of 2007