Sens. Warren, McCain push to break up big banks
BOSTON Sen. Elizabeth Warren is trying to make good on a key campaign pledge to protect consumers from Wall Street gambles.
The Massachusetts Democrat and three other senators Thursday introduced a modern version of the 1933 Glass-Steagall Act. The bill would separate traditional banks that have savings and checking accounts and are insured by the Federal Deposit Insurance Corporation from riskier financial institutions that offer services such as investment banking, hedge funds and private equity activities.
The original act was passed after the stock market crash of 1929 and separated commercial banks from investment banks. Many of its core provisions were repealed in 1999.
Warren was joined in introducing the bill by Arizona Republican John McCain, Washington Democrat Maria Cantwell and Maine independent Angus King.
"Since core provisions of the Glass-Steagall Act were repealed in 1999, shattering the wall dividing commercial banks and investment banks, a culture of dangerous greed and excessive risk-taking has taken root in the banking world," McCain said in a statement. "Big Wall Street institutions should be free to engage in transactions with significant risk, but not with federally insured deposits."