Hillary Clinton doesn’t support revival of Glass-Steagall Act

Hillary Clinton says she doesn’t support reinstating a Depression-era banking law that separated commercial and investment banks because her forthcoming proposal for U.S. financial reform is “more comprehensive.”

• What is it? The Glass-Steagall Act, passed in 1933, prohibited commercial banks from participating in the investment banking business and created the Federal Deposit Insurance Corporation (FDIC) to protect bank deposits from institutional failure. But major provisions of the law were repealed in 1999 under President Bill Clinton, a move some believe contributed to the 2008 global credit crisis because commercial banks — now free to invest in things such as real estate — were saddled with billions of dollars in losses tied to cratering U.S. home prices. Several lawmakers on both sides of the aisle have called for the reinstatement of the law to make banks “too big to fail” much smaller, minimize risk and prevent such a crisis from happening again.

• Who supports it? Vermont Sen. Bernie Sanders and former Maryland Gov. Martin O’Malley — two of Clinton’s challengers for the Democratic presidential nomination — as well as Massachusetts Sen. Elizabeth Warren, who along with Arizona Sen. John McCain, reintroduced legislation to revive Glass-Steagall this year.

“Despite the progress we’ve made since 2008, the biggest banks continue to threaten our economy,” Warren said in a statement introducing the legislation. “The biggest banks are collectively much larger than they were before the crisis, and they continue to engage in dangerous practices that could once again crash our economy.”

Read more: https://www.yahoo.com/politics/hillary-clinton-doesnt-support-revival-of-150542856.html