April 7, 2017

Public Citizen Applauds Reintroduction of 21st Century Glass-Steagall Act

Statement of Bartlett Naylor, Financial Policy Advocate, Public Citizen

Note: The 21st Century Glass-Steagall Act was reintroduced Thursday by U.S. Sens. Elizabeth Warren (D-Mass.), John McCain (R-Ariz.), Angus King (I-Maine) and Maria Cantwell (D-Wash.).

Public Citizen enthusiastically welcomes the reintroduction of the 21st Century Glass-Steagall Act. This bill restores the separation of commercial and investment banking, protects government-backed deposits from being used in high-risk speculation and takes a major step in reducing the size of the megabanks.

America prospered for decades when commercial banks deployed the funds made inexpensive and abundant through the taxpayer-backed Federal Deposit Insurance Corp. When the 1999 repeal of Glass-Steagall allowed them to spill into the high-octane arena of investment banking, the nation soon suffered the worst financial crash since 1929.

The principle of Glass-Steagall enjoys the support of both political party platforms, the president, numerous scholars and even the architects of Citigroup, namely John Reed and Sanford Weil. Citigroup was the first of the post Glass-Steagall banks.

We invite the president and both parties to make good on their promises and make this bill into law.

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