Barofsky recently authored a book, titled, “Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street.”
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H. Rodgin Cohen, senior chairman of Sullivan & Cromwell, took the opposite position.
A breakup of banks would prohibit “bank affiliates from underwriting, from being market makers and from engaging in certain hedging activities,” he said. “Now, all three of these activities have been termed by Chairman Volker himself to be beneficial to our economy and society.”
Cohen said the argument was way off track, saying that the Glass-Steagall Act was “enacted on the basis of a false premise, which is that bank securities activities caused the banking collapse in the ’30s.