Secretary Clinton is right to fight back against Republicans trying to sneak Wall Street giveaways into the must-pass government funding bill. Whether it’s attacking the CFPB, undermining new rules to rein in unscrupulous retirement advisers, or rolling back any part of the hard-fought progress we’ve made on financial reform, she and I agree: “President Obama and congressional Democrats should do everything they can to stop these efforts.” –Elizabeth Warren on her faceBook page, where she shared Hillary’s NY Times op-ed on How I’d Rein in Wall St.
“I do think further steps are wise, as Hillary Clinton has talked about, for de-complicating some of these large financial institutions. But going to [Glass-Steagall] and doing that in a uniform way that applies to every financial institution is not the best way to do it,” Barney Frank told The Hill in an interview. Also: “Even if we did Glass-Steagall, you’d still have institutions that are too big to fail,” Frank said.
For what it’s worth, Mrs. Clinton had the better case. Mr. Sanders has been focused on restoring Glass-Steagall, the rule that separated deposit-taking banks from riskier wheeling and dealing. And repealing Glass-Steagall was indeed a mistake. But it’s not what caused the financial crisis, which arose instead from “shadow banks” like Lehman Brothers, which don’t take deposits but can nonetheless wreak havoc when they fail. Mrs. Clinton has laid out a plan to rein in shadow banks; so far, Mr. Sanders hasn’t. Paul Krugman
currently is a co-sponsor of the Elizabeth Warren/John McCain bill to reinstate those provisions. — Bernie’s website
Jan 5 — Democratic presidential candidate Bernie Sanders spoke about Wall Street reform in a speech in New York on Tuesday. He said he will fight to reinstate the Glass-Steagall Act. The Vermont senator said that his rival Hillary Clinton is wrong in saying “that Glass-Steagall would not have prevented the financial crisis because shadow banks like AIG and Lehman Brothers, not big commercial banks, were the real culprits.”
S. 1282 (113th): 21st Century Glass-Steagall Act of 2013
H.R. 3711 (identical) Referred to Committee, Last Action: Dec 11, 2013,
- March 9, 1933: The Emergency Banking Act (ch. 1, 48 Stat. 1) was enacted within four hours of its introduction. It was prompted by the “bank holiday” and was the first step in Roosevelt’s “first hundred days” of the New Deal. The Act was drafted in large part by officials appointed by the Hoover administration. The bill provided for the Treasury Department to initiate reserve requirementsand a federal bailout to large failing institutions. It also removed the United States from the Gold Standard. All banks had to undergo a federal inspection to deem if they were stable enough to re-open. Within a week 1/3 of the banks re-opened in the United States and faith was, in large part, restored in the banking system. The act had few opponents, only taking fire from the farthest left elements of Congress who wanted to nationalize banks altogether. (from Wikipedia)
- June 12, 1933: The Glass–Steagall Act of 1933 (ch. 89, 48 Stat. 162) was a follow up to the Glass–Steagall Act of 1932. Both acts sought to make banking safer and less prone to speculation. The 1933 act, however, established the Federal Deposit Insurance Corporation. (from Wikipedia)
- Not the semi-repeal of Glass-Steagall did not cause the crash.