April 6, 2017
White House Economic Adviser Gary Cohn Supports Glass-Steagall Principles? But Will It Last?
Statement of Bartlett Naylor, Financial Policy Advocate, Public Citizen
Note: National Economic Council Chair Gary Cohn reportedly endorsed the principles of Glass-Steagall in a Wednesday meeting with members of the Senate Banking Committee.
As with any candy offered by a stranger, Public Citizen is tempted – but wary – of Goldman Sachs alumnus Gary Cohn’s reported support for a Glass-Steagall separation of commercial and investment banking.
Ideally, Cohn supports the robust measure provided in the 21st Century Glass-Steagall Act authored by U.S. Sen. Elizabeth Warren (D-Mass.). This measure would reduce the operations and size of the megabanks, providing the chance for greater financial stability.
But Goldman Sachs isn’t a charity. If Cohn envisions a law that allows his former firm to return to abusive practices such as selling flawed securities to unwary investors, then this offer is toxic.
Public Citizen proposed a shareholder resolution at Goldman Sachs seeking a study of a return to its status in 2007, before it became a bank holding company as part of 2008’s taxpayer-funded bailout. The U.S. Securities and Exchange Commission allowed Goldman to omit the resolution on the grounds that such a study was considered “ordinary business.”