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The Pecora Commission, launched in 1932, investigated the causes of the 1929 Wall Street crash. It was named after its chief counsel Ferdinand Pecora, a former New York prosecutor. The Pecora Commission reported on the causes of the financial crisis that caused the Great Depression, and led to the passage of several banking reforms, including the Glass-Steagall Act.
One of the Pecora Commission conclusions was that common ownership of commercial and investment banks created problems, including:
1) jeopardizing depositors by investing their funds in the stock market;
2) loss of the public’s confidence in the banks, which led to panic withdrawals;
3) the making of unsound loans; and
4) an inability to provide honest investment advice to depositors because banks were conflicted by their underwriting relationship with companies.
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- ↑ Brady Dennis, In Original Reformer, a Model, Washington Post, September 16, 2009, retrieved October 10, 2009.
- ↑ Sold Out - How Wall Street and Washington Betrayed America , Consumer Education Foundation, March, 2009. Retrieved october 10, 2009.
- Ron Chernow, Where Is Our Ferdinand Pecora?, NY Times Op-Ed, January 5, 2009.
- Brady Dennis, In Original Reformer, a Model, Washington Post, September 16, 2009