Thursday, May 17, 2012

Elizabeth Warren: Reinstitute Glass-Steagall

Asked by FDL's David Dayen if she was confident that the current investigations by the task force co-chaired by Eric Schneiderman, into mortgage abuses and similar malfeasance, would result in an adequate accountability of the biggest Wall Street banks and their leaders, Elizabeth Warren was blunt beyond any mistaking of her meaning:

I am not confident. No. And that’s the answer to your question. The American people are pushing for more accountability. They need to keep on pushing until it happens.

As to re-establishing Glass-Steagall, she said this:

As you remember, the Volcker rule, which I supported, was designed to permit biggest financial companies to stay in trading, but to do it in a way which was safe. Many of [the] experts say that’s not possible. If you look at a trade, or a hedge, it’s often hard to tell in advance what it is. They both exhibit the same kind of properties. So the question is what to do with that. If it’s true that the Volcker rule can’t adequately manage the risks that the largest banks are determined to take on, then the right answer is Glass-Steagall. A modernized Glass-Steagall. Separate commercial banking from Wall Street. I held a meeting and someone asked me, why support Glass-Steagall. And I said, because banking should be boring.

[Commercial] Banking should be boring: hear, hear! In this week in which banking (commercial/investment, no distinction) was anything but boring and quite possibly criminal to the tune of $3 billion, we need to learn and implement that lesson more than ever.

If Warren is elected to the Senate and (Dog forbid) Rmoney takes the presidency, Rmoney is going to shit his pants every time she enters a room...

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