The literature dealing with the need for reform is impressive, as is the stature of many of the proponents who, incidentally, include important officials within the Federal Reserve System. It is difficult for me to believe that there can be lasting and meaningful financial modernization without a thorough examination of the proposals for deposit insurance reform that are presently on the table. The continued separation of banking and commerce is likely to be reexamined again. This bill is a pause, and it is only a pause, and it is not going to last very long. As a matter of historical fact they are simply wrong.
Banking is a live, vibrant, ever-changing business.
Efforts to constrain it are either doomed to failure or, more likely, doomed to destroy the business itself, to force it into other channels. This has been recognized clearly whenever there have been attempts to devise rigid rules to define what is, and what is not, the banking business. Never has this been more persuasively argued than by a New York court about a century and a half ago. They are, therefore, left to implication. In my view, no more serious error could be made in modernizing financial law than to attempt to confine the powers of banks to their 1999 boundaries.