Financial adviser: Clinton won't push Glass-Steagall bank bill

Hours after Hillary Clinton vowed to crack down on Wall Street, an adviser said she has no plans to push a bank break-up bill beloved by the left.

Alan Blinder, a former Federal Reserve official now advising the Clinton campaign, told Reuters Monday that she has no plans to push for the return of a banking law that separates commercial and investment banks.

Liberals frequently argue that the Glass-Steagall Act, whose repeal was signed into law by President Bill Clinton, would have helped minimize the damage of the last financial crisis. But Blinder, who worked in the Clinton White House as well, said that is not in the cards for Hillary Clinton.
“You’re not going to see Glass-Steagall,” he said, adding that he had spoken directly to Clinton about the issue.

That law separated traditional banking activity from riskier investment banking, and its proponents argue it if it had stayed in place, the fallout from the last financial crisis would have been much less severe.

Liberal critics of Wall Street frequently call for a return to that firewall, and Sen. Elizabeth Warren (D-Mass.) proposed its reinstatement earlier this month.

During a major economic speech Monday, Hillary Clinton was actually interrupted by a heckler calling on her to reinstate the law.

But former President Clinton has argued against such calls, pointing out that the banks that collapsed would not have been altered by Glass-Steagall, and bristled at claims his administration was too friendly to the financial sector.

In a lengthy economic address in New York, Hillary Clinton laid out her economic platform as a presidential candidate, and included a lengthy section vowing tough rules for Wall Street.

She said Washington must “go beyond” the Dodd-Frank financial reform law, calling banks “still too complex and too risky.” She vowed to prosecute banks and bankers that break the law, as well as appoint tough regulators that would crack down on “too big to fail” financial institutions.

On matters like banker prosecutions, Clinton sounded similar to Warren, the left’s most prominent voice on financial matters. But when it comes to Glass-Steagall, it appears the two differ.

Original Article
Source: thehill.com/
Author: Peter Schroeder