Great Depression 2.0 was caused in part by Wall St bank high stakes gambling. We ought to cool the market down by regulating the things that banks are allowed to invest/speculate in. Real banks take deposits and have taxpayer backed FDIC insurance. If the government guarantees the bank's deposits, then the government had the right to limit the kind of risks the bank can run. In my view banks should not invest/speculate in common stocks, secondary mortgages, mortgage backed securities, credit default swaps, and commodities, including gold. These things are very risky, and do nothing to finance real economic growth or jobs. The purpose of banks is to finance real estate and loan to business and individuals. We ought to write a bank regulation law to forbid bank speculation in risky and unproductive things.
There are a lot of other things out there that look like banks, talk like banks, but don't have deposits and FDIC insurance. They are fake banks. They can speculate to their heart's content, but the government should make absolutely clear that it will never bail them out.
In fact, we should require display of a fake bank sign on the offices of fake banks. Something like "Deposits are NOT insured"
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