With Glass-Steagall Revival, A Call to Bust Up the Megabanks

Published
on Friday, July 12, 2013 by Common
Dreams

Five
years after financial collapse, says Sen. Warren, and biggest banks are now
bigger than ever

- Jon Queally, staff
writer

US Sen. Elizabeth Warren
(D-MA) and others on Thursday introduced a new bill that revives the call to
bust up the nation’s largest banks and financial institutions by once again
demanding a separation between the traditional banking practices of savings and
loans from the far riskier behavior taken on by large investment, complex
trading, and hedge fund operations.

The legislation, called
the 21st Century Glass-Steagall Act, is designed as the modern version of
the Banking Act of 1933 (the original Glass-Steagall) whose repeal in 1999 many
credit with ushering in the banking deregulations that spawned the housing crisis
and financial collapse of 2008.

Despite repeated efforts
to “break up the big banks” by public interest groups and some legislators, all
of those efforts—despite the destructive recession, foreclosure crisis, and
unemployment epidemic—have been thwarted by the politically powerful financial
industry represented by Wall Street lobbyists and others.

“The four biggest banks
are now 30% larger than they were just five years ago,” said Sen. Warren, “and
they have continued to engage in dangerous, high-risk practices that could once
again put our economy at risk. The 21st Century Glass-Steagall Act will
reestablish a wall between commercial and investment banking, make our
financial system more stable and secure, and protect American families.”

Reporting to the
development, Huffington Post’s Zach
Carter comments:

The legislation is
unlikely to be signed into law, but underscores a deepening rift between the
House and Senate over financial accountability. While bipartisan coalitions in
the House have been moving legislation to deregulate swaps — the complex
financial products at the heart of the 2008 banking collapse — a host of Senate
bills cracking down on Wall Street risk have garnered Democratic and GOP
support.

http://jhaines6.wordpress.com/2013/07/12/with-glass-steagall-revival-a-call-to-bust-up-the-megabanks/