Former Prime Minister Michel Rocard Calls for Glass-Steagall

PARIS — In a full-page interview published in Le Figaro July 10-11th, the former French Prime Minister (1988-91) called for bringing back the Glass-Steagall Act of 1933, as the way out of the crisis. To a question from the journalists as to how a consensus around a policy for coming out of the crisis can be built, Rocard said clearly, "The ways to an exit are of a financial order. First we must readopt the Glass Steagall Act everywhere, the American law of 1933, repealed in 1999, which forbade banks from making investments with the money from their deposits... Then, prohibiting all derivatives products detached from contracts connected to the real economy. Furthermore, the fiscal paradises [offshore tax havens] must be eradicated, since they harbor half the immense liquidity which is circulating in the world. Finally, returning purchasing power to wage-earners [i.e. the middle class], in order to favor growth."