Bill to separate traditional and investment banking to be reintroduced
U.S. Senator Elizabeth Warren, a Massachusetts Democrat, reported she and a team of lawmakers are introducing a bill geared at a revived Glass-Steagall Act. Glass-Steagall Act was a Depression-era regulation that separated investment and commercial banking.
"Anyone who wants to take big risks should go to Wall Street and should stay away from the basic banking system," Warren said yesterday in a conference the media.
The bill is sponsored by Warren along with Senators Maria Cantwell, a Washington Democrat, Angus King, a Maine independent, and John McCain, an Arizona Republican. Warren told government bodies testifying before the lawmakers that she was at first surprised that they backed her immediately.
The bill would split riskier financial firms from traditional banking companies that provide basic checking and savings accounts, which are insured by the Federal Deposit Insurance Corp. The riskier financial firms includes companies that have operations involving insurance, hedge funds, swaps dealing, private equity, and investment banking, the lawmakers' statement said.
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