President Donald Trump said today that he is considering dismantling the big banks on Wall Street, with a return to a system that separates the operations of investment banking from commercial banking.
“I’m looking at that right now. There are some people who want to go back to the old system, right?” So let’s look at that, “Trump said in an interview with Bloomberg.
The former real estate tycoon referred to his call during the election campaign to an update for the “21st century” of the Glass-Steagall Act of 1933 that required the separation of investment activities from consumer lending in the great banking.
The law was overturned in 1999 under the chairmanship of Bill Clinton, who advocated a downgrade of financial regulations, and some analysts blame part of the blame for the 2008 crisis with the bursting of the financial bubble backed by toxic mortgage assets.
Trump, however, did not offer further details as to what the next steps would be in this Glass-Steagall upgrade.
His proposal contrasts with his insistence on the need to reverse much of the financial supervisory strengthening rules prompted by his predecessor in office, Barack Obama, on the grounds that they stifle the flow of credit to households and businesses.
Trump’s remarks triggered sudden declines in the Wall Street stock market, especially in the securities of major financial institutions such as Citigroup or Bank of America, but later recovered.