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I vaguely remember someone somewhere asking why US banks don't offer stocks and bonds, and I didn't know the answer either until now.
After some vigorous and exhaustive research, wading through some rather heady financial texts.... Okay, it was one of those glossy little booklets with large, colorful pictures (but no pop-ups!) that I was reading while sitting on the John.
I stumbled upon a little tid-bit known as the Glass-Steadgall Act of 1933.
Long story short, right after the Great Depression, some believed that a major reason why banks went belly-up was because they invested too heavily in the stock market. So, when the stock market crashed, so did the banks.
In response, the Glass-Steadgall Act basically banned US banks from stocks and bonds. As a consequence to that, they also could not offer such services to their customers.
Of course, it's also a controversial piece of legislature. Times are different now, and so is banking in general. So, some have argued that the Glass-Steadgall Act could be doing more harm than good. As such, it was repealed in 1999. The ban was lifted.
Some provisions are still in place, and I am not exactly sure what is and is not allowed. Anyone want to fill in the blanks here?
For more details, here's a good article on the Glass-Steadgall Act of 1933
After some vigorous and exhaustive research, wading through some rather heady financial texts.... Okay, it was one of those glossy little booklets with large, colorful pictures (but no pop-ups!) that I was reading while sitting on the John.
I stumbled upon a little tid-bit known as the Glass-Steadgall Act of 1933.Long story short, right after the Great Depression, some believed that a major reason why banks went belly-up was because they invested too heavily in the stock market. So, when the stock market crashed, so did the banks.
In response, the Glass-Steadgall Act basically banned US banks from stocks and bonds. As a consequence to that, they also could not offer such services to their customers.
Of course, it's also a controversial piece of legislature. Times are different now, and so is banking in general. So, some have argued that the Glass-Steadgall Act could be doing more harm than good. As such, it was repealed in 1999. The ban was lifted.
Some provisions are still in place, and I am not exactly sure what is and is not allowed. Anyone want to fill in the blanks here?
For more details, here's a good article on the Glass-Steadgall Act of 1933