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American Banker Warns: Without Dodd-Frank, Glass-Steagall Could Come In

Feb. 7, 2017 (EIRNS)—American Banker’s Washington, D.C., bureau chief Rob Blackwell warned bankers in a column last night, that their enthusiasm over tearing up Dodd-Frank could well usher in something much worse, at least in their eyes: the reinstatement of the 1933 Glass-Steagall law.

American Banker, a voice of the financial "industry" since 1836, suggests bankers think about "the political long game." Blackwell reminds his financier readers that [Obama’s] Dodd-Frank

"was not a law built to dramatically reinterpret the financial system. Policymakers like former Rep. Barney Frank D-Mass., then-Treasury Secretary Tim Geithner and former Sen. Chris Dodd, D-Conn., were far more interested in preserving the existing system than than tearing it down."

Hillary Clinton, too, campaigned only for modest reforms of the law.

Thus, bankers happy about President Trump’s assault on Dodd-Frank, had better wake up to the fact that "there is a significant downside to what’s going on, one that might not be clear to banks until it’s too late." Dodd-Frank’s elimination

"could lead to far more drastic consequences. Items like big-bank breakups, higher capital requirements and a restoration of the Glass-Steagall Act, which separated commercial and investment banking, may ultimately be back on the agenda."