Elizabeth Warren Calls for Restoring Glass-Steagall
Last week, JP Morgan Chase managed to gamble away $2 billion in an extremely short period of time--and more losses are likely coming for the world's biggest bank. CEO Jamie Dimon himself admitted that the move was going to play right into the hands of "pundits" and others who support the Volcker Rule, which would restrict US banks from making certain kinds of risky trades.
Today, though, Elizabeth Warren and the Progressive Change Campaign Committee went further, calling for a restoration of the Glass-Steagall act, repealed in 1999 after heavy lobbying by the big banks.
The email reads, in part:
A new Glass-Steagall would separate high-risk investment banks from more traditional banking. It would allow Wall Street to take risks, but not by dipping into the life savings and retirement accounts of regular people.
And by making banks smaller, a new Glass-Steagall could also help put an end to banks that are "too big to fail" -- further avoiding costly taxpayer bailouts.
Wall Street's risky bets nearly brought the economy to its knees in 2008. But instead of taking responsibility, Wall Street lobbied to water down the Dodd-Frank financial reforms of 2010 and fought to weaken the reforms Congress passed.
It has become clear over time -- and made even clearer this past week -- that additional Wall Street reforms are needed.
Warren told the Washington Post's Ezra Klein in an interview, "Glass-Steagall said in effect that hedge funds should be separated from commercial banking. If a big institution wants to go out and play in the market, that’s fine. But it doesn’t get the backup of the federal government."