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Italy: M5S Financial Spokesman Argues for Glass-Steagall

June 23, 2017 (EIRN)—The Chamber of Deputies financial spokesman for the M5S party, Alessio Villarosa, has posted a Glass-Steagall item on his Facebook page, featuring an interview with Prof. Giulio Sapelli, an economist who is known for his pro-Glass-Steagall position.

"Banking Program: Separating Investment Banks and Commercial Banks" is the title of the post. Villarosa summarizes Sapelli’s thought as the following:

"Put speculators on one side, and those who collect savings to help families and business on the other side. Separation between investment banks and commercial institutions is a primary necessity if we want to bring confidence again to the credit sector.

"M5S aims at establishing a banking system in which there is a clear separation between investment banks that speculate in the financial economy, and commercial banks, the only ones authorized to collect deposits to finance families and businesses.

"The United States responded to the 1929 Great Depression with the 1933 Glass-Steagall Act, eventually repealed by Bill Clinton at the end of his term. In Italy, too, we had a banking act, dated 1936, which clearly separated banks and industries and stressed the public function of intermediary activities. That too, was dismantled by the 1993 reforms and, after decades of substantial stability of our credit system, what happened is under everybody’s eyes.

"Thus, it is necessary today to separate the destinies of our savings and our deposits from speculator’s perversions, gambling with oscillations and volatility of the paper economy. We must re-establish the nature of public interest of financial intermediaries and it is necessary to promote both the return to a real banking ’biodiversity’ (avoiding for instance punishing credit unions and saving banks) and a homogeneous distribution of banking institutions on the territory."

Indeed, Professor Sapelli in his interview says also that the EU Banking Union must be suspended, that the central bank should be brought back under national control, and that nation-states "cannot be abolished." Furthermore Sapelli, considered to be a Keynesian, in describing and praising President Franklin Delano Roosevelt’s program, says that

"Roosevelt was not a Keynesian, did not even know what Keynes was, understood perfectly that if Signora Gina put her money in the bank, she wanted her money to be preserved with some investment in a chicken that laid eggs, or in a piece of land, and not for speculating."