PRESS RELEASE
Warren: Glass-Steagall ‘Is Exactly What We Should Do’
Sept. 30, 2015 (EIRNS)—Speaking at the Edward M. Kennedy Institute in Boston Sept. 28, Sen. Elizabeth Warren responded to a question about reinstating Glass-Steagall:
"Back in the 1930s when we had the Great Depression, a remarkable thing happened in this country ... that as a people, we said we don’t have to live in a boom and bust economy....
"And so we did three things. We made it safe to put money in banks. That’s called FDIC [Federal Deposit Insurance Corporation] insurance.... And we put a cop on the beat. That’s the SEC [Securities and Exchange Commission] to make sure that they didn’t sell fake stocks and things like that.
"And the third one is, we separated ... checking account, and savings accounts, from the high-risk, high-profit, high-loss world of Wall Street trading; and that was Glass-Steagall.
"The banks hated it because they wanted the profits you can make from the big trading. You can get the big CEO salaries and return more to shareholders.
"And Wall Street hated it because they wanted access to your grandma’s savings account money, because it’s cheap money and it doesn’t demand the same kind of return."
Warren named the 1930s to 1980s as the period that the Glass-Steagall wall was solid, and the 1980s-1990s as the period when holes were put in it until it was knocked down.
"What happened is those largest financial institutions, you keep putting more concentrations of money, more concentration of power, and that’s how we ended up in 2008 with too big to fail, and $700 billion in the TARP bailout and literally trillions of dollars in backdoor bailouts from the Fed."
While claiming that Dodd-Frank has since "done a lot," Warren said that restoring Glass-Steagall will make regulating big banks
"much easier.... It would bring down the size of banks. It would make the financial system more secure and safer. But it would mean that the guys who want to do the high-risk trading can’t get access to your savings account, and your bank won’t make those kinds of profits—if you’re one of the really big banks—that they can make otherwise.
"And that’s exactly what we should do. So yes, 21st-Century Glass-Steagall all the way. All the way."
