The continuing publicity and calls for reinstating Glass-Steagall are prominently led by Time Magazine, in a new article, "The Case for Banking Regulation," datelined June 4, by Rana Foroohar, and posted this week in advance.
Time's two-page piece opens by citing the JPMorgan Chase "fiasco," to say that Wall Street interests have lobbied and dictated in Washington, D.C., all along — from Dodd-Frank becoming law in July 2010, to the present — for so-called banks to do anything they choose to.
"Dodd-Frank was supposed to be a way of capturing the spirit of the Glass-Steagall banking law, enacted in 1933... But under constant assault by the banking lobby, Dodd-Frank retreated from that goal, which is why a small but vocal group of economists, politicians and activists are asking whether we shouldn't restore Glass-Steagall, or put in place something like it, as a way of making banking safer. As Senate candidate from Massachusetts Elizabeth Warren puts it, 'Banking should be boring, and that's inconsistent with trading.' "
"It's a debate worth having.... I'm all for re-examining the merits of Glass-Steagall and how it might be updated for today's market..."
In a posting May 23 on MarketWatch.com, "What Washington is eyeing after J.P. Morgan trade," author Robert D. Orol reports that Republicans might rally around Thomas Hoenig, former chairman of the Kansas City Fed and an advocate of Glass-Steagall, who in March became a Commissioner on the Board of the Federal Deposit Guarantee Corporation. Orol writes, "Another idea [for today's financial mess] that has some Congressional staffers and legislators talking is a concept put forward by former Kansas City Federal Reserve Bank President Thomas Hoenig that would bar big banks from broker-dealer activities or sponsoring hedge funds or buyout firms outright.
"The move wouldn't be a complete return to the Glass-Steagall Act — a law approved in 1933 and eliminated in 1999 that prohibited a commercial bank from investment-banking activities...." Orol observes that, "Jaret Seiberg, analyst at Guggenheim Securities LLC in Washington, said the Hoenig plan is getting considerable attention on Capitol Hill..."
And typical of local media coverage is this week's article in Minnesota, in the St. Cloud Times: "Our View: JP Morgan Loss Fuels Reform Calls." It states, "Another suggestion involves reinstating the Glass-Steagall Act, which came about in the Great Depression to stabilize banking but was repealed in the late 1990s to allow banks to expand and enter the securities industry. In other words, deregulation..."