Bill Would Restore Glass-Steagall Wall Between Banks, Insurers

July 22, 2013

A small bipartisan group of U.S. senators has introduced legislation to restore the wall separating traditional banking activity from riskier financial services.

The bill, called the 21st Century Glass-Steagall Act, shows some lawmakers are frustrated that megabanks have continued to grow since the 2007-2009 financial crisis.

“The four biggest banks are now 30 percent larger than they were just five years ago, and they have continued to engage in dangerous, high-risk practices that could once again put our economy at risk,” said Democratic Senator Elizabeth Warren from Massachusetts, one of the sponsors.

The other sponsors are Republican Senator John McCain from Arizona, Democratic Senator Maria Cantwell from Washington, and Senator Angus King, an independent from Maine who caucuses with Democrats.

The legislation would bring back elements of the 1933 Glass-Steagall Act, which divided commercial and investment banking, and was repealed in 1999.

The 2010 Dodd-Frank financial reform law stopped short of busting up companies and instead curtails Wall Street’s risk-taking.

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