Thomas Hoenig States Support for Glass-Steagall at Washington, D.C., Paul Volcker Event
Dec. 6, 2016 (EIRNS)—Thomas Hoenig, Vice Chairman of the Federal Deposit Insurance Corporation (FDIC), spoke at a Washington, D.C., event yesterday, stating his support for reinstating the Glass-Steagall banking separation law. The occasion, held at Georgetown University, was chaired by Paul Volcker, former Federal Reserve Chairman (1979-1987) and former chair of Obama’s Economic Recovery Advisory Board, who was in the lead of the phalanx of those acting for Wall Street in 2010 to prevent the restoration of Glass-Steagall.
Hoenig’s remarks were covered last night by thestreet.com, whose reporter, Ronald Orol, wrote, "Hoenig ... told a conference organized by former Federal Reserve Chairman Paul Volcker that Congress’s 1999 dismantling of the 1933 Depression-Era Glass-Steagall Act created a host of risks that led to the 2008 financial crisis.
"’When we took away Glass-Steagall, it was a choice we made, but I do want to think about the consequences,’ Hoenig said. ’You allowed the commercial banks with the government safety net to engage in these other activities. When you did that, you provided them an expanded subsidy to do trading, whatever it is, etc. And those other institutions were now at a disadvantage, so they had to change their model.’"
Hoenig is cited as among those being considered to be Trump’s appointee for head of bank supervision at the Federal Reserve.