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Anniversary of Glass-Steagall Repeal Used To Promote Restoration of FDR’s Crucial Banking Act

Nov. 13, 2015 (EIRNS)—Thursday being the 16th anniversary of the repeal of FDR’s Glass-Steagall Banking Act, and with the next Democratic Party presidential debate set for Saturday, a flurry of articles recognized that, as Washington’s "inside the beltway" site, The Hill headlined its Nov. 12 article on the U.S. presidential race: "Glass-Steagall Takes Center Stage in 2016."

"A Depression-Era banking law is helping to shape the 2016 presidential field, as Wall Street critics push hard for its return... Where candidates stand on its possible return has become a litmus test in both parties, with supporters arguing Congress needs to restore it to prevent the next financial collapse,"

The Hill wrote. And that puts Hillary Clinton "in a tough spot." Smelling the political winds in the country, Republican candidates have stepped up rhetoric against Wall Street, but former Governor Mike Huckabee is the only active Republican candidate backing the restoration of Glass-Steagall, The Hill noted. Former Citibank chair John Reed threw his weight into Thursday’s Glass-Steagall chorus, with an op-ed in the Financial Times, "We Were Wrong About Universal Banking," whose concluding paragraph asserts bluntly:

"As I have reflected about the years since 1999, I think the lessons of Glass-Steagall and its repeal suggest that the universal banking model is inherently unstable and unworkable. No amount of restructuring, management change or regulation is ever likely to change that."

Reed also points to Glass-Steagall as central to the presidential debate.

"In America, the universal bank is a relatively new creation. It is 16 years to the day since the Glass-Steagall Act, a law enacted during the Great Depression that had the effect of banning universal banks, was repealed,"

Reed wrote.

"There is an intense debate in the US about whether or not policymakers should adopt a modern Glass-Steagall law, which would effectively end the universal banking model. The question is likely to be a live one in the upcoming presidential election campaign."