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Riding Cohn Momentum, Senators Call for Glass-Steagall Return

Image: Riding Cohn Momentum, Senators Call for Glass-Steagall Return
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Friday, 07 Apr 2017 07:15 AM

A day after White House economic adviser Gary Cohn said he would support efforts to separate Wall Street’s investment banking operations from consumer lending, a group of lawmakers proposed legislation that would do just that.

The legislation, whose sponsors include Senator Elizabeth Warren of Massachusetts, one of Wall Street’s loudest critics, would establish a new version of the Glass-Steagall Act, a Depression-era law that kept bricks-and-mortar lending separate from investment banking for more than six decades.

“Despite the progress since 2008, the biggest banks continue to threaten our economy," Warren said in a statement. “Reinstating Glass-Steagall has broad bipartisan support, and it’s time to get it done."

Cohn, a former Goldman Sachs Group Inc. executive, described his position on radically reshaping how Wall Street’s biggest firms operate in a Wednesday meeting with lawmakers, including Warren.

The legislation, also backed by Republican Senator John McCain of Arizona, has been introduced in prior years, without gaining much momentum. A group of lawmakers in the House, led by Representative Marcy Kaptur of Ohio, reintroduced similar legislation that calls for reinstating Glass-Steagall earlier this year.

Cohn’s comments to lawmakers on Wednesday echo what Trump and Republican lawmakers have previously said about wanting to bring back some version of Glass-Steagall. White House officials haven’t said what an updated version of the measure might look like or whether they support Warren’s specific approach.

In the years after Glass-Steagall’s 1999 repeal, banks such as Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. gobbled up rivals and pushed into new businesses, becoming one-stop-shopping financial behemoths.

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Trump adviser backs spliting lending, investment banking; Legislation would create a new version of Depression-era law
senators, glass, steagall, banks, cohn
Friday, 07 Apr 2017 07:15 AM
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