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Another Top Banker Attacks Trump Over Glass-Steagall

May 5, 2017 (EIRNS)—Brian Moynihan, CEO of Bank of America, became the second Wall Street bank head—after Richard Kovacevic of the scandalos Wells Fargo—to come out swinging against restoring the Glass-Steagall banking separation law. Evidently worked up, Moynihan on May 4 called Glass-Steagall re-enactment "crazy" and attacked President Trump for suggesting breaking up the Wall Street banks on May 1.

"It would be against America’s interests to break up the large banks," Moynihan said at a Bloomberg symposium.

He claimed that Bank of America’s takeover of the failing Merrill Lynch in September 2008, proved that large commercial banks’ patriotic duty is to rescue casino-gambling investment firms which are failing, and to make the commercial banks’ insured deposits available to them at other times, while having to be bailed out themselves by the government. "What’s better, to have Merrill Lynch standing alone or tucked inside?" he said, suggesting tender paternal feelings for the wolves of Wall Street. "We can stabilize it in times of stress."

Moynihan didn’t mention that "stabilizing" Merrill Lynch, when the latter was again downgraded by the credit agencies in 2012, meant transferring Merrill’s then-$52 trillion derivatives exposure onto Bank of America’s federally-insured commercial bank’s books, where it remains today. This blatantly violated parts of the Glass-Steagall Act which had not been repealed— known as Sections 23A and 23B of the Federal Reserve Act—but the Federal Reserve refused even to request a report from BoA on the immense, illegal and dangeroU.S. transaction.

Against Moynihan’s and Kovacivic’s outbursts—the latter, in the Wall Street Journal April 19, was so hysterical it has been rebuked by half a dozen letters to the Journal since—Bloomberg News’ headline on a May 4 article, "Trump’s Threats ... Don’t Scare Wall Street Yet," sounds hollow. Bloomberg is rather trying to reassure readers that Trump’s economic advisors are not particularly pushing Glass-Steagall when talking to Wall Street CEOs! "The subject rarely comes up," it reports. And a leading Glass-Steagall opponent in Congress, Sen. Bob Corker (R-TN), tells Bloomberg it hasn’t got much traction there—lawmakers are, after all, dependent on Wall Street’s money.

It does have traction with the American public and constituencies; they react to Trump’s suggestions with optimism about Glass-Steagall, which scares Wall Street badly.