Glass-Steagall is the indispensable first step to global economic recovery. It will immediately halt the onset of hyperinflation, remove government commitment from bailing out toxic debts, end too-big-to-fail banks, and 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, H.R. 3711 was recently introduced on December 11, 2013.
Standard and Poors warned all major European banks Wednesday that they can expect to have their bond ratings downgraded as the result of the European Union decision to go for a bail-in policy under the new Single Resolution Mechanism. Fitch is also expected to issue a report with a similar downgrading as early as next week.
The EU reached a "final solution" to the Euro banking system bankruptcy yesterday after an all-night session. German Finance Minister Wolfgang Schaeuble was drawn into the talks around 5:30 a.m. to sign off on the deal.
On Friday the Federal Deposit Insurance Corporation filed suit against 16 of the world's mega-banks, and against the British Banks' Association, for colluding to rig the interest-rate-reference figure, the Libor (London Interbank Offered Rate).
In an interview with The Nation, March 7, Independent Sen. Bernie Sanders of Vermont spoke at length about his willingness to run for President of the US in 2016 because of the miserable state of politics in the U.S.
A lengthy article by former IMF chief economist Prof. Simon Johnson calls FDIC vice chairman Thomas Hoenig's debunking of the 'bail-in' menace on Feb.
Former Portuguese Member of European Parliament Paulo Casaca argues in an article in Huffington Post UK yesterday, that Glass-Steagall is the alternative to the Bail-in model...
New Federal Reserve Chair Janet Yellen again claimed, this time to the Senate Banking Committee on Thursday, that the turmoil and devaluations in so-called "emerging markets" since the Fed began to "taper" its money printing, would absolutely not affect the U.S. economy, and was "not a concern."
She'll regret making the claim.
Top Wall Street banks — JP Morgan Chase, Bank of America, and Wells Fargo — are funding and supporting the primary opponent to Rep. Walter Jones (R-NC)...
Glass-Steagall Memorial S. 1824, dubbed the "Millbury's Citizens' Petition, Resolution Urging Congress to Enact Glass-Steagall," was debated at the Massachusetts State House Joint Committee on Financial Services yesterday...
Michel Rocard, the Socialist Prime Minister of France 1988-1991, today released a column entitled "Taming Europe's Banks," in which he praises the effects of the original 1933 Glass-Steagall Act and implies that such legislation is nee
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.