Donald Trump promised to drain the swamp, it was one of his main talking points during his campaign. That hasn’t been the case so far, but according to Business Insider, four Senators will be bringing back a version of the Glass-Steagall Act. An act that once separated commercial banks from all other financial activities, but was repealed in 1999. The repeal backfired with terrible consequences that ended in the Financial Crisis.
Elizabeth Warren (D-Massachusetts), John McCain (R-Arizona), Maria Cantwell (D-Washington), and Angus King (I-Maine) will be re-introducing the bill, calling it “the 21st Century Glass-Steagall Act.”
According to Warren, the law will protect American taxpayers, make it fair for community banks and credit unions to compete, and it will help in decreasing the chances of a future financial crises.
“Reinstating Glass-Steagall has broad bipartisan support from the public and policymakers, including from President Trump, Treasury Secretary Steve Mnuchin, and National Economic Council Director Gary Cohn. Both the 2016 Democratic and Republican party platforms supported reinstating Glass-Steagall.
“The legislation, first introduced in the 113th Congress [2013-2014] by Senators Warren, McCain, Cantwell and King, would separate traditional banks that have savings and checking accounts and are insured by the Federal Deposit Insurance Corporation from riskier financial institutions that offer services such as investment banking, insurance, swaps dealing, and hedge fund and private equity activities.
“The bill would clarify regulatory interpretations of banking law provisions that undermined the protections under the original Glass-Steagall and would make ‘Too Big to Fail’ institutions smaller and safer, minimizing the likelihood of a government bailout.”
You can read on the full Business Insider article here.