Cheers to Senators Warren (D-MA), McCain (R-AZ), Cantwell (D-WA), and King (I-ME) for introducing a contemporary version of the Glass-Steagall Act:
At today’s Senate Banking Committee hearing, Elizabeth Warren introduced the 21st Century Glass-Steagall Act of 2013, co-sponsored by Senators McCain, Cantwell, and King. This new bill mirrors the original 1933 Glass-Steagall Act, which separated traditional banking activity (like checking and lending) from the riskier activity investment banking (like derivatives)…
This new bill from Senator Warren aims to play a part in reversing this trend so the banks will be smaller. After all, the three biggest banks (Chase, Bank of America, and Citi) are all bloated conglomerate banks that have enormous traditional and investment subsidiaries, so these banks wouldn’t be able to continue as they’re currently instituted. They would be broken up into much smaller firms.
What’s more, the 21st Century Glass-Steagall Act of 2013 will make it so banks cannot gamble with derivatives using depositors’ money like they do today. Currently, anyone who has money at banks like Chase, Bank of America, or Citi is implicitly using that money to help these banks make amplified bets that have the potential to cause another global meltdown. Reintroducing Glass-Steagall will make it so depositors’ money cannot be used for the derivatives market. This would be a major step toward restoring sanity to Wall Street.
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