New York and London: Twins in Finance and Folly

New York Times
"“Should we have a new Glass-Steagall?” asked Liam Halligan, the chief economist with Prosperity Capital Management, a London-based asset manager, who also writes a weekly column for The Telegraph. He felt very strongly that the answer was yes. ...Every time I heard the phrase, it caught me up short. Glass-Steagall, of course, was an American law passed during the Depression to separate investment banking and commercial banking. It was dismantled 66 years later, in 1999, because it was viewed by the American political establishment, starting with Treasury Secretary Robert Rubin, as an outmoded relic of an earlier age. Glass-Steagall never existed in Britain.
.....“Gordon Brown instituted a lot of pro-City policies,” Mr. Augar said. “He cut the capital gains tax. He combined about nine different regulators into the F.S.A.” — the Financial Services Authority — “which adopted something it called ‘proportional regulation.’ ” Mr. Brown himself had a more apt phrase: “light touch regulation,” he called it. In other words, he consciously aligned regulation in Britain with the free-market, deregulatory approach being promoted by Mr. Greenspan and Mr. Rubin.
Mr. Augar says he believes that the regulatory environment helped bring about the “Americanization” of the City of London, and that it was ultimately ruinous. .....Besides, although no one will say this out loud, Britain can’t regulate unilaterally anymore — it is simply too dependent on American institutions. Its regulatory response will be to mimic whatever the Obama administration decides to do."