Elizabeth Warren is making good on her promise to scare the living bejeezus out of Wall Street. Today, she’ll introduce a bill to reenact Glass-Steagall.
Glass-Steagall is the 1933 law that separated commercial and investment banking. Back in 1999 it was repealed by the Gramm-Leach-Bilely Act at the urging of Wall Street heavyweights like then-Citi CEO Sandy Weill.
Then the financial crisis happened. Most banks failed, those that didn’t swallowed the failures and became massive.
After all that, Sandy Weill said he was wrong on national television.
Elizabeth Warren was sent to the Senate for being a crusader against Wall Street excess. For many, this is one massive way to do that. Arizona Republican John McCain (no slouch), Washington Democrat Maria Cantwell and Maine Independent Angue King are co-sponsoring the bill.
You can read it in full here, but the introduction goes a little something like this:
To reduce risks to the financial system by limiting banks’ ability to engage in certain risky activities and limiting conflicts of interest, to reinstate certain Glass-Steagall Act protections that were repealed by the Gramm-Leach-Bliley Act, and for other purposes.
Bottom line, this is a move to reduce the size of America’s behemoth banks. We’ve heard the slogans not just from Warren, but also Senators David Vitter (R-LA) and Sherrod Brown (D-OH)— “too big to fail,” “too big to manage.”
Wall Street’s army of lobbyists are unlikely to let this stand without the epic knock-down drag out fight we know they’re capable of. Let them march. Warren loves being a conversation starter, and she’ll have this one over and over again. The beatings will continue until morale improves.
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