Louis Brandeis' book Other People's Money and How the Bankers Use It is a short unflattering critique of the American banking system in the early 1900s. The book, published before Brandeis became Justice Brandeis in 1916, is a gem. Some of the financial reforms for which Brandeis advocated in the book came to pass through Depression-era legislation, making a chapter here and there outdated. But the majority of the text and the financial prescriptions therein are eerily still very relevant today. (The more things change ... .)
Three short observations. First, it's interesting to read about the machinations a century ago of direct lineage predecessors of some of today's Name Brand financial services firms. Makes one think mischievous behavior can be in "banking DNA."
Second, readers familiar with current financial regulation may come away with the sense that the current American financial regulatory apparatus is like a very old house that has been remodeled badly over and over. Third, some of the underwriting commissions and share dilution Brandeis describes are breathtakingly confiscatory of investors' capital.
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