President Donald Trump said Monday he was contemplating breaking up the big Wall Street banks.
“I’m looking into that right now,” he told Bloomberg about bringing back the “old system” that separated consumer lending and investment banking.
The move would revive a version of the repealed Glass-Steagall Act that was passed in 1933, which required banks to separate commercial deposit banking from investment banking. While campaigning, Trump said he supported a 21st century version of the law.
Stocks fell after headlines from Trump’s interview crossed. At 12:56 p.m. ET, the Dow was down 14 points, or 0.07%.
Shares of several big banks including Morgan Stanley, Citi, and Goldman also fell.
The act was repealed in 1999, enabling the rise of mega banks like Citigroup and JP Morgan that cater to both small checking accounts and million-dollar investment portfolios. Some economists have argued that its repeal nurtured some of the risky behaviour among banks that led to the financial crisis.