"A 21st Century Glass-Steagall Act"

Tyler Durden's picture


We are confident the following amusing bill titled grandiosely enough "A 21st Century Glass-Steagall Act" (the Bill text here) by Elizabeth Warren, John McCain et al, to pretend Congress is not a bought and paid for by Wall Street marionette, will have a last minute rider that says "Compliance with any or all of the above provisions is purely voluntary."

From Elizabeth Warren

Senators Warren, McCain, Cantwell, and King Introduce 21st Century Glass-Steagall Act

Senators Elizabeth Warren (D-MA), John McCain (R-AZ), Maria Cantwell (D-WA), and Angus King (I-ME) today will introduce the 21st Century Glass-Steagall Act, a modern version of the Banking Act of 1933 (Glass-Steagall) that reduces risk for the American taxpayer in the financial system and decreases the likelihood of future financial crises.

The legislation introduced today would separate traditional banks that have savings and checking accounts and are insured by the Federal Deposit Insurance Corporation from riskier financial institutions that offer services such as investment banking, insurance, swaps dealing, and hedge fund and private equity activities. This bill would clarify regulatory interpretations of banking law provisions that undermined the protections under the original Glass-Steagall and would make "Too Big to Fail" institutions smaller and safer, minimizing the likelihood of a government bailout.

"Since core provisions of the Glass-Steagall Act were repealed in 1999, shattering the wall dividing commercial banks and investment banks, a culture of dangerous greed and excessive risk-taking has taken root in the banking world," said Senator John McCain. "Big Wall Street institutions should be free to engage in transactions with significant risk, but not with federally insured deposits. If enacted, the 21st Century Glass-Steagall Act would not end Too-Big-to-Fail.  But, it would rebuild the wall between commercial and investment banking that was in place for over 60 years, restore confidence in the system, and reduce risk for the American taxpayer."

"Despite the progress we've made since 2008, the biggest banks continue to threaten the economy," said Senator Elizabeth Warren.  "The four biggest banks are now 30% larger than they were just five years ago, and they have continued to engage in dangerous, high-risk practices that could once again put our economy at risk.  The 21st Century Glass-Steagall Act will reestablish a wall between commercial and investment banking, make our financial system more stable and secure, and protect American families."

"Too many Main Streets across America have paid the price for risky gambling on Wall Street," Senator Maria Cantwell said. "This bill would restore clear bright lines that separate risky activities from the traditional banking system. It's time to restore faith in our financial institutions by rebuilding the firewall that protected our economy for decades in the wake of the Great Depression. Restoring Glass-Steagall would focus our financial system where it belongs: getting capital into the hands of job creators and businesses on Main Streets across America."

"As Maine families continue to feel the sting of the 2008 economic downturn, America's largest financial institutions continue to engage in risky banking and investment activities that threaten the health of our financial sector and our economy as a whole. While recent efforts at financial sector regulatory reform attempt to address the ‘too big to fail' phenomenon, Congress must take additional steps to see that American taxpayers aren't again faced with having to bail out big Wall Street institutions while Main Street suffers," Senator Angus King said. "While the 21st Century Glass-Steagall Act is not the silver bullet to end ‘too big to fail,' the legislation's re-establishment of clear separations between retail and investment banking, as well as its restrictions on banking activities, will limit government guarantees to insured depository institutions and provide strong protections against the spillover effects should a financial institution fail."

The original Glass-Steagall legislation was introduced in response to the financial crash of 1929 and separated depository banks from investment banks. The idea was to divide the risky activities of investment banks from the core depository functions that consumers rely upon every day.  Starting in the 1980s, regulators at the Federal Reserve and the Office of the Comptroller of the Currency reinterpreted longstanding legal terms in ways that slowly broke down the wall between investment and depository banking and weakened Glass-Steagall. In 1999, after 12 attempts at repeal, Congress passed the Gramm-Leach-Bliley Act to repeal the core provisions of Glass-Steagall.

* * *

Let the laughter commence.

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Thu, 07/11/2013 - 12:50 | 3741903 km4
km4's picture

Iran asks India to settle all oil payment in rupees - sources http://news.yahoo.com/iran-asks-india-settle-oil-154833878.html via @YahooNews

Thu, 07/11/2013 - 12:52 | 3741911 Ahmeexnal
Ahmeexnal's picture

A rupee in hand is worth 100,000 euros in a bank.

Thu, 07/11/2013 - 12:55 | 3741927 malikai
malikai's picture

I'm sure Mrs. Warren will make the windows look very nice before the hurricane arrives.

I'll bet the flower bed will be lovely as well.

Thu, 07/11/2013 - 13:05 | 3741972 DaveyJones
DaveyJones's picture

Yes, they should call it the Glass-Houses Act

Thu, 07/11/2013 - 13:21 | 3742006 101 years and c...
101 years and counting's picture

in an effort to thank those responsible for destroying capitalism in 1999, here is the vote to throw away Glass Steagall in the first place:


Thu, 07/11/2013 - 13:33 | 3742035 NoDebt
NoDebt's picture

It's easy to propose legislation you know won't pass.  This is just to placate some voting block somewhere to say "we tried to do something."

Go get Sandy Weil to convince Obama to support it.  Cause lord knows, Obama has been SO tough on the banks he would probably support this in a hot minute.  Speaking of which, where is that "I didn't know anything about it, I had nothing to do with it" president anyway?  Probably better not to ask, I guess.

Thu, 07/11/2013 - 15:50 | 3742571 Buckaroo Banzai
Buckaroo Banzai's picture

Hard to take Princess Lie-awatha seriously about anything. Faux-cahantas can go piss up a rope.

Thu, 07/11/2013 - 17:58 | 3743037 xtop23
xtop23's picture


McCain's name is attached to it.... that should be enough to know that it's simply grandstanding and has no possible chance in your wildest drug induced hallucinations of passing.

Now.......if you perhaps added a rider that would send aid to our cannabalistic, middle eastern, regime change proxies for a cool $100bn..... THEN you're cooking with gasoline.

Can him, Harry Reid, and Lindsey Graham hurry up and have lethally debilitating strokes already?

Fri, 07/12/2013 - 13:15 | 3745815 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

Sanford Weill advocating for a 21-century Glass-Steagall...

While I know it is a true fact I still am unable to comprehend it.  It seems like it should please me but it just makes me feel confused and a little bit nauseous. 

Thu, 07/11/2013 - 13:18 | 3742000 financial apoca...
financial apocalyptic contagion's picture

haha very clever ahmeexal right on

although rupee in hand right now is usually after taking a shit
cant wait to wipe with a benjamin soon, as soon as it can't even buy me a decent sized line to start the day with  

Thu, 07/11/2013 - 12:56 | 3741931 DoChenRollingBearing
DoChenRollingBearing's picture

How curious, I would have thought Iran would have preferred Indian gold.  I wonder what Indian products Iran would want with their rupees...

Thu, 07/11/2013 - 15:41 | 3742538 Marco
Marco's picture

Basically everything ...

"The two countries had been trying to reduce New Delhi's debts by promoting exports and India recently said it would allow goods to be imported for re-export to Iran as long as they added value of at least 15 percent, to encourage trade."

This is a very dangerous game for India, the countries with sanctions against Iran are not going to like this, guess India really needs the money ...

Thu, 07/11/2013 - 12:51 | 3741905 Ahmeexnal
Ahmeexnal's picture

Did McCocaine have a moment of lucidity?

Thu, 07/11/2013 - 12:56 | 3741930 Flakmeister
Flakmeister's picture

He can be surprising at times, the Alzheimers will kick in and he will deny saying anything in about a month...

Thu, 07/11/2013 - 13:09 | 3741983 DaveyJones
DaveyJones's picture

I know. His wife told me that sometimes, in his sleep, he starts yelling something about Charles Keating, Speed Racers Car, and to stop counting the fingers on his left hand.  

Thu, 07/11/2013 - 15:52 | 3742582 Buckaroo Banzai
Buckaroo Banzai's picture

McCain is a lying sack of shit. If he's behind this, you can bet it isn't going anywhere. It is political grandstanding of the most craven sort.

Thu, 07/11/2013 - 14:18 | 3742203 Ferrari
Ferrari's picture

Isn't it easy to back a bill, for posterity's sake, that you know has no hope of passing or damaging the extant regime?

Thu, 07/11/2013 - 12:54 | 3741922 buzzsaw99
buzzsaw99's picture

smaller tbtf, that's a great idea! make our fascist institutions smaller, yeah, that's wonderful. what a brilliant concept.

Thu, 07/11/2013 - 12:54 | 3741923 Flakmeister
Flakmeister's picture

Too little, too late or so the old saw goes....

Thu, 07/11/2013 - 12:57 | 3741937 malikai
malikai's picture

Opensecrets implies that she might actualy be genuine in some slight manner.

Thu, 07/11/2013 - 12:58 | 3741944 pods
pods's picture

Maybe this is a sign that all the "bank holding companies" have finally hidden all their shit assets at the FED, skimmed their take off laundering Treasuries, and can now stand on their own again?

And it only took 5+ years!  Remarkable.


Thu, 07/11/2013 - 14:21 | 3742215 Flakmeister
Flakmeister's picture

That could well be the case..

Thu, 07/11/2013 - 13:06 | 3741977 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

...and they're going to hold Jon Corzine criminally responsible for his actions, too.

HEAD FAKE -- gotcha on that one!  You believed us too! HAHAHAHAHA

I think someone has a really sick sense humor.  The 21st Century Glass Steagall act will be the same as it has been since the end of the 20th Century.

Thu, 07/11/2013 - 13:51 | 3742090 Lore
Lore's picture

The psychopaths are taking us in a direction that doesn't resolve nicely. It is going to be terrible.

Thu, 07/11/2013 - 14:40 | 3742280 Flakmeister
Flakmeister's picture

You got the tense wrong, it is "took"....

Thu, 07/11/2013 - 16:19 | 3742673 Lore
Lore's picture

Oh no, it's still in progress and going to get far worse. Have you ever worked with one of them?  They lack conscience. There is no limit to the evil that they will commit in order to get what they want. This is the simple but profound understanding that must be reached before appropriate action can be taken.

Thu, 07/11/2013 - 12:54 | 3741924 twh99
twh99's picture

Why don't they just repeal the Gramm-Leach-Bliley Act which would put back the original Glass-Steagel Act?

To my way of thinking that would be a good first step.

Thu, 07/11/2013 - 12:58 | 3741946 Quinvarius
Quinvarius's picture

Because McCain wants his own bill so he will be the focal point of the bribes as it is altered.

Thu, 07/11/2013 - 13:02 | 3741959 Strut
Strut's picture

Ding, Ding, Ding! We have a winner!

Thu, 07/11/2013 - 13:07 | 3741979 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

Always more, never less.

Thu, 07/11/2013 - 15:26 | 3742480 RockyRacoon
RockyRacoon's picture

Repealing GLBA is not an option.  So many changes or work-arounds were done with the original Glass-Steagall provisions (sections) of the Banking Act of 1933 that Glass-Steagall was watered down.  A new act with clear provisions would help solve the problems.



Glass–Steagall developments from 1935 to 1991

Thu, 07/11/2013 - 12:56 | 3741932 Quinvarius
Quinvarius's picture

Why do I have to be an "American Tax Payer" to be considered worthy of having my anger noted in this bill?  They fkd the whole GD planet, to include all American Citizens, born or unborn.  Only the dead have been immune from this jackassery.

Thu, 07/11/2013 - 13:15 | 3741994 malikai
malikai's picture

Which dead?

American dead?

Fri, 07/12/2013 - 03:46 | 3744269 swiss chick
swiss chick's picture

Grateful dead?

Thu, 07/11/2013 - 12:56 | 3741936 AlamoJack
AlamoJack's picture

Whatcha' bet that CREDIT UNIONS get the big DIK, uh, I mean McCain, in this bill.  Gosh, history does repeat.

Thu, 07/11/2013 - 12:58 | 3741940 Tinky
Tinky's picture

Perhaps they could provide some high-quality alfalfa for the horses that have left the barn, as well.

Thu, 07/11/2013 - 12:59 | 3741950 buzzsaw99
buzzsaw99's picture

Be afraid, john mccain wants to do something.

Thu, 07/11/2013 - 13:01 | 3741954 Zen Bernanke
Zen Bernanke's picture

perhaps they should also address the runaway federal reserve banking system, which most assuredly does not act in the best interests of the citizens.  

Thu, 07/11/2013 - 13:02 | 3741961 sleigher
sleigher's picture

They remove the law in 99 so they can rape the people of their money, and now, before the real crash happens they put them back?  Is that supposed to make us think they are doing their jobs and looking out for us?  



Thu, 07/11/2013 - 13:36 | 3742042 NoDebt
NoDebt's picture

Don't worry, this is never getting enacted.

And also don't worry, they still aren't looking out for you.

Situation normal.

Thu, 07/11/2013 - 13:03 | 3741964 digitlman
digitlman's picture

I don't see anything about hard leverage limit numbers in here.  Until then, FAIL.

Thu, 07/11/2013 - 13:05 | 3741973 firstdivision
firstdivision's picture

If you want to see something hard and leveraged, try something from Peter North Productions.

Thu, 07/11/2013 - 13:47 | 3742078 Crtrvlt
Crtrvlt's picture

they can leverage all they want just no bailouts ever again (via tarp and the significantly bigger one and counting via the FED).  that should be inserted in there 


Thu, 07/11/2013 - 16:11 | 3742648 OneTinSoldier66
OneTinSoldier66's picture

Only the free market can actually deliver that. Not some politicians scribble on a peice of paper.

Thu, 07/11/2013 - 13:06 | 3741969 firstdivision
firstdivision's picture

Either go back to the original Glass-Steagall, or stop the fucking bailout of banks.  Let the market be free, or choke the life out of it.

Thu, 07/11/2013 - 13:05 | 3741974 Henry Hub
Henry Hub's picture

You have to love Elizabeth Warren. She's still tilting at windmills trying to take on the TBTF banksters. Hopeless, but we have to applaud the effort.

As for McCain, he's gotten so senile that he's forgotten who's giving him his bribes.

Thu, 07/11/2013 - 13:46 | 3742065 RockyRacoon
RockyRacoon's picture

I would have to agree. Since Dr. Paul has left, we are not represented by anyone who is willing to confront the thieves during hearings except for Warren.  She is outnumbered by the other Congress members who are either on the take or just plain clueless.  Hence, her effectiveness is limited, just as Dr. Paul's was.  You can expect Fox News to pillory her just as they did Ron Paul.

Note: My down arrows will come from depicting Fox in a negative light, regardless of any truth concerning Ms. Warren.  That's just the way things are.

Thu, 07/11/2013 - 14:44 | 3742303 Northeaster
Northeaster's picture

I think Rep. Alan Grayson is pretty sharp in all things Fed/Economics, unlike Warren & Paul, it is his background & was arguably fairly successful at it.

Thu, 07/11/2013 - 15:03 | 3742381 RockyRacoon
RockyRacoon's picture

Grayson is well intended, but his grandstanding overshadows his message.  If he would just be straightforward and leave the smirking aside he could be more effective.

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