Elizabeth Warren introduces 21st Century Glass-Steagall Act

Yesterday, Sen. Elizabeth Warren showed us she knows what voters want, and she knows how to work with other people to get it:

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).

The original law was repealed in 1999 by the Gramm-Leach-Bliley Act, though Glass-Steagall had been eroding for years leading up to that point. Gramm-Leach-Bliley, along with several laws passed during that era, allowed the big banks to transform into megabanks, creating “too big to fail.”

[…] From 1935 to 1990 the three biggest banks averaged around 10% of total bank assets, but by 2009 they suddenly had over 40%.

This new bill from Senator Warren will reverse this trend and make the banks 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 under the new Glass-Steagall Act. Instead these megabanks would be broken up into much smaller firms.

What’s more, the new Glass-Steagall Act will make it so banks cannot gamble with derivatives using depositor’s money, as they do today. Currently, depositors at banks like Chase, Bank of America, or Citi implicitly use their money to help these banks make amplified bets that have the potential to cause another global meltdown.

Reintroducing Glass-Steagall will make it so depositor’s money cannot be used for the derivatives market. This would be a major step toward restoring sanity to Wall Street.

H/t medical malpractice attorney Thomas Soldan.

4 Responses to Elizabeth Warren introduces 21st Century Glass-Steagall Act

  1. imhotep July 12, 2013 at 10:44 am #

    Elizebeth Warren for president. All others have morphed into caricatures of themselves. Cheap imitations.

  2. The Truth Hurts July 13, 2013 at 10:03 am #

    She still has to answer for her Harvard Law School application in which she claimed to be a Native American. Is there anyone who doesn’t believe her intent was to use the school’s affirmative action policy to positively influence their decision to hire her?

  3. brendancalling July 13, 2013 at 10:17 am #

    Hahaha, can I have some imaginary ketchup on that Nothingburger you’re serving “Truth Hurts”?

  4. The Truth Hurts July 13, 2013 at 11:05 am #

    So, Brendan. Do you believe she lied about her ethnicity? Do you believe politics is more important than integrity?

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