Glass-Steagall is the indispensable first step of LaRouche's Four Laws to save the U.S.A.. It will end the hyperinflation, destroy the toxic debts, and finish off the too-big-to-fail banks,. It will force a separation of commercial banking functions from investment banking functions, thus cleaning up the nation's banking system to make way for real, long-term investments.

There are now two bills in each house calling for the restoration of President Roosevelt's 1933 Glass-Steagall law. H. R. 129 & its Senate companion bill S. 985, introduced by Rep. Marcy Kaptur and Senator Tom Harkin respectively, and most recently, S. 1282, known as the "21st Century Glass-Steagall Act," championed by Senator Elizabeth Warren, whose companion House bill is H.R. 3711.

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The head of the German Savings Bank Association (DSGV), Georg Fahrenschon, used his appearance at an Oct. 11 press conference at the annual IMF/World Bank confab in Washington to say things there, which he should in fact be campaigning about in Germany: "We need a better binding of monetary and currency policy to the real economy."

How It Works

Since 1999, banks have been allowed to use commercial deposits and assets as fuel for securities trading on the derivatives market.

Because commercial and speculative assets are so heavily comingled, the government is forced to protect the assets of banks making risky bets through near perpetual bailouts and purchasing of toxic debt.

It was the derivatives bubble that blew up the system and bankrupted the US banks in the 2007-2008 crash.

1. Commercial Banking institutions have one year to divest themselves of all non-commercial banking units, with no cross management or ownership between commercial and non-commercial units.

2. Commercial Banks are barred from using more than 2% of its capital for the creation, sale, or distribution of securities (certain bank-qualified securities are exempted)

3. Prevents Commercial Banks from loaning their commercial deposits into such vehicals as would support the creation and circulation of securities.

4. No securities of low or potentially low value can be placed by a bank into its insured commercial bank units.

* Adds provision stating Glass-Steagall is the preeminant regulator of the banks, limiting banks from putting its depositors and shareholders at risk.

Glass-Steagall forces separation of commercial from investment banks, it ends Too Big To Fail, bars government bailouts, and will stop the onset of hyperinflation.