Saw this in Salon.com and thought I would pass it on. The Glass-Steagall Act was repealed in 1999 as part of the Graham-Leach-Bliley Act, which enabled Travelers Insurance and Citicorp to merge and create Citigroup— breaking the barrier that had been in place since 1933 preventing investment firms, insurance companies, and commercial banks from merging into one firm. Many financial experts claim this directly contributed to the financial meltdown of 2007-08.
Elizabeth Warren and John McCain are part of a bipartisan effort to pass a revived version of the 1993 Glass-Steagall Act, in a push to crack down on risky Wall Street practices.
Warren, D-Mass., and McCain, R-Ariz., are joined by Sens. Maria Cantwell, D-Wash., and Angus King, I-Maine, in cosponsoring the 21st Century Glass-Steagall Act, which “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,” according to a press release from Warren.
“If enacted, the 21st Century Glass-Steagall Act would not end Too-Big-to-Fail. But, it would rebuild the wall between commercial and investment banking that was in place for over 60 years, restore confidence in the system, and reduce risk for the American taxpayer,” said McCain in a statement.