Create more sunshine for financial institutions
Published 10:13 am Thursday, October 8, 2009
In 1994, without hearing or debate, Congress began a series of deregulatory actions that led to the repeal in 1999 of the Glass Steagall Act, the last of the New Deal laws of the 1930’s that protected us from irresponsible bank investment practices. It removed a requirement that banks publish their quarterly financial results in the local newspaper of record.
We no longer had ready access to the basic information about how banks are doing. Are they making money? Are they investing wisely? Will they be there next year? An inquiring mind would have a hard time finding answers to those questions.
Until the public learned that some banks had grown “too large to fail” and that Uncle Sam would be required to borrow billions of dollars to save them, most of us were clueless about the practices in banking.
Now there is a proposal in Congress that would bring back the sunlight. The Financial Transparency Restoration Act, HR 2727, would once again require financial institutions to publish information about their performance.
The bill was introduced by Rep. Walter Jones, a Republican from North Carolina. He believes, and we believe it is important to restore basic accountability in financial services. This bill will go a long way towards doing that.
If anything at all has changed since 1913, it is that former US Supreme Court Chief Justice Louis Brandeis, upon discussing the impact of public disclosure on the growing power of financial combinations in the securities market, could only tell us that “Sunshine is said to be the best of disinfectants.’ After years of experience, we can say with some certainty that, in fact, it is.
From the National Newspaper Association