Traditional banks could get starring role in 'Wall Street 2'

Is it a case of evolution or decay? The viewers of Oliver Stone’s forthcoming sequel to Wall Street will have to decide for themselves.

The New York Times reports today that Stone, spurred by the momentousness of the financial crisis, has finally given in to calls to return to the subject of his 1987 cinematic hit. He has begun work on Wall Street 2. After nearly 30 years Stone will be leading Wall Street’s hero Gordon Gekko out of jail, and into a changed world.

Gone are the days when hedge fund barons and rogue investors caused all the trouble: Gekko is about to discover that the formerly staid commercial banks share major responsibility for this round of problems. Stone told the Times that the New York Fed, which didn’t exist in the original film, will get a prominent role in the new story.

What may not make it into the script are the countless changes to the financial regulatory system that have been made since Wall Street’s creation. In the course of the past 25 years, Glass Steagall has been dismantled, derivatives regulation stifled and consumer protection practically ignored. But if Stone’s depiction is to carry the factual accuracy that leads to artistic truth—and he seems to be doing his homework on the facts—the effects of those changes will maintain a presence. Financial insiders should watch carefully.