Subject: File No. S7-41-11
From: Mike P. McKeever

October 8, 2011

Securities and Exchange Commission


The rule proposal is inadequate in its current formulation; it needs to be a stronger reincarnation of Glass-Steagall in order to prevent further bank failures and asset bubbles using FED funds.

The future of the economy is at stake.

Repealing Glass-Steagall resulted in pre-depression levels of bank failures and contributed substantially to the recent crisis.

Here's a link to my paper on bank regulation from 2009:

Here's how I would run the system:


Commercial banks can lend money for businesses, houses, commercial property and cars. They may not be the beneficial owner of those assets, I think that is the correct term. They cannot sell stocks, insurance or any other products.

They may own real estate that they occupy only - no investment property.

Commercial banks can receive money from the public for demand deposits, CD's, time deposits and any other instrument backed by the FDIC. They may not receive money from the sale of any asset unless they sell it as result of foreclosure.

Commercial banks will be monitored closely by the FED for good financial structure, management, loan portfolio soundness, etc.

Failing commercial banks, since they possess part of the country's money supply should be wound down slowly and absorbed where possible, after making depositors whole.


Investment banks can buy shares of stock in any company or any asset they choose. They may not borrow funds from the FED.

Any security or product sold by an investment bank must be approved by the SEC - there are NO black boxes. All is disclosed.

Investment banks can go bankrupt regardless of size.

Thank you for your time and consideration.

Best regards,

ike P. McKeever
Life is Short. Tell the Truth