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Sen. Elizabeth Warren (D-Mass.) urged progressives Tuesday to defend Wall Street reform laws and pushed again for re-instating legislation that would break up big banks.
Warren called on Democrats to rally behind her proposal to re-instate Glass-Steagall, which President Bill Clinton repealed in 1999, during a speech in Washington to mark the fifth anniversary of the 2010 Dodd-Frank Wall Street Reform law. She portrayed the repeal of Glass-Steagall as one of the causes of the 2008 economic collapse, something that Federal Reserve officials and Clinton refute.
{mosads}”That high wall between high-risk trading and boring banking was punched full of holes until in the late 1990s, it was knocked down when Glass-Steagall was eventually repealed,” she said. “And not long after that, the worst crash since the 1930s hit the American economy.”
Warren’s comments come a day after an advisor to Democratic presidential frontrunner Hillary Clinton said Clinton has no plans to push for the bank break-up bill.
“You’re not going to see Glass-Steagall,” Alan Blinder said, adding that he had spoken directly to Clinton about the issue.
Two of Clinton’s challengers, Sen. Bernie Sanders (I-Vt.) and former Maryland Gov. Martin O’Malley, have called for re-instating it.
“The idea is pretty simple behind this one: if banks want to engage in high-risk trading — they can go for it, but they can’t get access to ensured deposits and put the taxpayers on the hook for that reason,” Warren said.
Warren played a crucial role in crafting portions of Dodd-Frank before she was elected into the Senate.
Republicans have argued that too many of the Dodd-Frank regulations are stifling economic growth. They say many of the medium- and small-sized financial institutions didn’t play a role in the 2008 collapse and are having to adhere to regulations written for big banks.
Warren criticized a proposal from Senate Banking Committee Chairman Richard Shelby (R-Ala.), who wants to weaken the regulations for medium-sized banking institutions to stimulate economic growth.
“Financial reform isn’t finished,” Warren said. “Right now, Republicans want to roll back Dodd-Frank, returning us to the days of bubbles and buy-outs. We are here to fight back.”
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