Glass-Steagall is the indispensable first step of LaRouche's Four Laws to save the U.S.A.. It will end the hyperinflation, destroy the toxic debts, and finish off the too-big-to-fail banks,. It will force a separation of commercial banking functions from investment banking functions, thus cleaning up the nation's banking system to make way for real, long-term investments.

There are now two bills in each house calling for the restoration of President Roosevelt's 1933 Glass-Steagall law. H. R. 129 & its Senate companion bill S. 985, introduced by Rep. Marcy Kaptur and Senator Tom Harkin respectively, and most recently, S. 1282, known as the "21st Century Glass-Steagall Act," championed by Senator Elizabeth Warren, whose companion House bill is H.R. 3711.

LATEST

Under the headline "In 7th Worcester race, Frost's Democratic challenger wants Obama impeached," the Worchester, MA, Telegram and Gazette reports on the program of Terry Burke Dotson, the Democratic candidate for the state legislature.

Lyndon LaRouche today called for immediate emergency action to reorganize the global financial system to save valid active accounts from wipeout along with the unpayable gambling debts that are set to detonate at any moment. The starting point, LaRouche emphasized, must be to save those valid accounts by reinstating Glass-Steagall right now—before the imminent blowout occurs.

How It Works

Since 1999, banks have been allowed to use commercial deposits and assets as fuel for securities trading on the derivatives market.

Because commercial and speculative assets are so heavily comingled, the government is forced to protect the assets of banks making risky bets through near perpetual bailouts and purchasing of toxic debt.

It was the derivatives bubble that blew up the system and bankrupted the US banks in the 2007-2008 crash.

1. Commercial Banking institutions have one year to divest themselves of all non-commercial banking units, with no cross management or ownership between commercial and non-commercial units.

2. Commercial Banks are barred from using more than 2% of its capital for the creation, sale, or distribution of securities (certain bank-qualified securities are exempted)

3. Prevents Commercial Banks from loaning their commercial deposits into such vehicals as would support the creation and circulation of securities.

4. No securities of low or potentially low value can be placed by a bank into its insured commercial bank units.

* Adds provision stating Glass-Steagall is the preeminant regulator of the banks, limiting banks from putting its depositors and shareholders at risk.

Glass-Steagall forces separation of commercial from investment banks, it ends Too Big To Fail, bars government bailouts, and will stop the onset of hyperinflation.