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The new economic crisis:
On The Fourth of July, 2012, the voices of some of the most respected figures referenced by the British press in London, had shocked the politically sentient circles of the planet, with the publication of a report whose source has included the members of a circle of public figures from among the most highly respectable, relevant circles of Great Britain. Those voices had announced that some crucial elements of that famous empire’s leading press had suddenly called for wiping out the nominally richest British banks in the world, in order to rescue both Britain and the United States from a terrible catastrophe. The relevant British proponents had proposed cooperation between the United States and Britain on this specific account.
Overview • By Jeffrey Steinberg
It is almost impossible to overstate the strategic significance of the fact that an important group within the top echelons of the British Establishment have come to the conclusion that Glass-Steagall is the only survival option open to them. The July 3 Financial Times editorial endorsement of Glass-Steagall has been followed, over the past 48 hours, by a series of further endorsements by leading figures, from Peter Hambro, of the old British merchant banking family; to Lord Myners, former Financial Services Secretary in the Gordon Brown government and a Rothschild-sponsored banker; to Terry Smith, a leading City banker who had called for a return to Glass-Steagall at the time of the September 2008 Lehman Brothers and AIG blowout. In Italy, the newspaper of record, Corriere della Sera, came out Friday with a big push for Glass-Steagall by leading financial correspondent Massimo Mucchetti, who is known to have, in the past, been close to Romano Prodi and the De Benedetti interests.
"While the FT supported those conclusions, we are now ready to go further. For all the diversification benefits, the cultural tensions between investment and retail banking can only be resolved by totally separating the two, on formal Glass-Steagall-style lines."
"Now the government has already diluted the ring fence that was proposed by Vickers, but the ring fence doesn't go far enough. We need to go to what is known as a Glass-Steagall model, which is a complete separation ..."
"But most of today's financial problems are because the investment bankers, using the balance sheets of the retail banks, don't share in the pain. They don't lose anything—and their culture has infected retail banking. They should never have been together and now they should be split, completely."
"We Europeans ... have abandoned the wise caution of the '30s—the Glass-Steagall Act in the U.S.A., the 1936 Banking Act in Italy—to return to banking as profit-maximizing enterprise, after the 1920s model. Maybe it is time to pop the bubble, going back to commercial banking as economic infrastructure, as closely regulated public utility with moderate profit."
"'Liborgate’ could trigger crucial banking reform. A Glass-Steagall split needs to happen and someone needs to get it done. There really is no alternative."
Restoring the Glass-Steagall Law
Marcy Kaptur's H.R. 1489 "Return to Prudent Banking Act" restores Glass-Steagall and is currently in committee now. Passing H.R. 1489 is one of our top priorities, and needs the organizing support to make sure it gets done. An updated list of cosponsors and other institutional support for Glass-Steagall is available on our Glass-Steagall page. Call your Representative or Senator and tell them to Co-sponsor Marcy Kaptur's H.R. 1489.
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