The Hill - Sens.
Elizabeth Warren (D-Mass.) and John McCain (R-Ariz.) are reintroducing
legislation to revive the Glass-Steagall Act, which would force big
banks to split their investment and commercial banking practices.
Glass-Steagall
was first passed in 1933 but repealed during the Clinton
administration, leading many progressives to argue that it contributed
to the 2008 financial collapse.
Warren and McCain, along with
their cosponsors, Sens. Angus King (I-Maine) and Maria Cantwell
(D-Wash.), said in a statement that the legislation would make big banks
that are "too big to fail" smaller and safer and minimize the
likelihood of a government bailout.
The bill, which they first
introduced in the last Congress, would separate traditional banking with
checking and savings accounts from financial institutions that offer
services such as investment banking, which are riskier.
"Despite
the progress we've made since 2008, the biggest banks continue to
threaten our economy," said Warren, an ardent Wall Street critic, in a
statement. "The biggest banks are collectively much larger than they
were before the crisis, and they continue to engage in dangerous
practices that could once again crash our economy."
McCain said
the repeal of Glass-Steagall led to "a culture of dangerous greed and
excessive risk-taking" in the banking industry.
"Big Wall Street
institutions should be free to engage in transactions with significant
risk, but not with federally insured deposits," McCain said in a
statement.
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