from The Daily Bell:
Elizabeth Warren Introduces 21st Century Glass-Steagall Act … At today’s Senate Banking Committee hearing, Elizabeth Warren introduced the 21st Century Glass-Steagall Act of 2013, co-sponsored by Senators McCain, Cantwell, and King. This new bill mirrors the original 1933 Glass-Steagall Act, which separated traditional banking activity (like checking and lending) from the riskier activity investment banking (like derivatives). The original law was repealed in 1999 by the Gramm-Leach-Bliley Act, though Glass-Steagall had been eroding for years leading up to that point. Gramm-Leach-Bliley, along with several laws passed during that era, allowed the big banks to transform into megabanks, creating “too big to fail.” To illustrate, the chart below shows that from 1935 to 1990 the three biggest banks averaged around 10% of total bank assets, but by 2009 they suddenly had over 40%. This new bill from Senator Warren will reverse this trend and make the banks smaller. – TooBigHasFailed.org
Dominant Social Theme: We need to use government force to ensure fairness for all.
Free-Market Analysis: This article is posted over at TooBigHasFailed.org, a website that parallels official positions such as those taken by Elizabeth Warren (see above) and Kansas City Federal Reserve Bank President Thomas M. Hoenig, who has written a white paper entitled “Too Big Has Failed.”
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