But the specifics of Glass-Steagall, which were created in 1934, underwriting securities and trading in securities are no longer in the current financial system the things that pose the greatest risk.
One prominent supplier of money market and mutual fund data Pete Crane, of Crane Data, says that both the Securities and Exchange Commission and the broader financial regulatory system are deadlocked on the issue of how, if at all, the industry ought to be reformed.
Through the market for mortgage-backed securities, bad practices in the consumer financial market put our entire system at risk.
America's financial system has two ailments: it owns a huge amount of toxic securities linked to falling house prices.
The Fed felt so sure of the sustainability of the recovery that it decided to halt its year long program of buying mortgage-backed securities, and signaled that it would probably begin draining excess reserves from the financial system sometime very soon.
Finally, its support of the financial system with massive asset purchases in frozen markets, including commercial paper, mortgage backed securities, and currently Treasury notes.
FORBES: What Ben Bernanke's Getting Right, And What He's Getting Wrong
Rising expectations that the Fed will pump more money into the financial system through additional purchases of long-term bonds, such as mortgage-backed securities, helped fuel a 1.1% increase in gold prices Wednesday.
While the joint central-bank effort didn't address the fundamental problems associated with European government debt, it underscored a "sense of urgency" to address the broad issues ailing the global financial system, said Seth Setrakian, co-head of trading at First New York Securities.
This ought to be part of a broader overhaul of a financial regulatory system that everyone knows is a mess: we have seven agencies overseeing banking, securities and futures and they still allowed the banks to behave like lunatics and failed to spot Bernie Madoff's Ponzi scheme.
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