Corriere della Sera Columnist: Italy Should Push for Glass-Steagall
July 7, 2012 • 8:42AM

Massimo Mucchetti, a pro-Glass-Steagall economics columnist for Italy's Corriere della Sera, called again for a reintroduction of Glass-Steagall Friday in a commentary on the Barclays scandal.

Mucchetti wrote that the LIBOR-fixing cartel is an "organized crime" association and should be prosecuted as such, not only in Britain, but internationally. The Barclays case "should involve Italian prosecutors if it comes out that the LIBOR manipulation has contorted the quotation of financial instruments which are negotiated on regulated Italian markets, even if the crime was committed abroad." Mucchetti refers to the indictment of rating agencies in Italy as a relevant example of how authorities should proceed.

The issue, however, involves a political reform. "We Europeans ... have abandoned the wise caution of the '30s—the Glass-Steagall Act in the U.S.A., the 1936 Banking Act in Italy—to return to banking as profit-maximizing enterprise, after the 1920s model. Maybe it is time to pop the bubble, going back to commercial banking as economic infrastructure, as closely regulated public utility with moderate profit. Financial speculation shall be the job of other entities, with different shareholders and without public protection. Maybe it is time to understand that the largest monopoly is called City of London, and the second largest Wall Street, where four to five banks control the entire derivative finance. There is the source of contagion, not in Greece. We must defend us from that source."

Mucchetti is the only journalist of a major European medium who previously covered the Cantwell-McCain bill in the U.S. Senate.