Italian Parliament Finance Committee Received Glass-Steagall Bills
July 1, 2012 • 9:17AM

Giulio Tremonti and a group of Lega Nord members of Parliament have filed two separate draft bills for a reintroduction of a Glass-Steagall-type banking separation. Tremonti's bill was introduced on May 18 and was forwarded to the Finance Committee on June 12. EIR had learned from reliable sources that the text was supposed to be introduced already last March, but turmoil in the Italian political situation had delayed it.

The Lega bill, instead, was introduced on March 15 and EIR has learnt that it has also been forwarded to the Finance Committee.

Insiders won't be surprised at discovering that the introductory text of Tremonti's bill is identical with the text on which the Lega Nord has been collecting signatures. In a key passage, Tremonti writes:

"Abandon the model of the so-called 'universal bank,' that is the DNA of systemic banks, the launching pad for the disastrous global megabank. In order to do this, it is necessary to introduce a new, updated version of the Glass-Steagall Act of 1933.

"In short, now as then, it is necessary to set up a firewall, to distinguish between ordinary banks and gambling banks, so that ordinary banks can no longer lend the money from their account holders to the gambling banks, or buy their structured products. This distinction can and must be made instantaneously, repealing the new laws introduced more or less everywhere in the '90s, and returning to the old laws from the '30s. This is exactly what needs to be done."

The Lega draft has 58 signatures, including future Lega Nord Secretary General Roberto Maroni as well as members of the Bossi faction. It has a shorter introduction where, among other things, it states:

"A crisis created by banks is destroying the real economy, knocking common people out through pro-cyclical economic measures which increase direct and indirect taxes, cause an indiscriminate increase of prices, including in primary goods, with a significant loss of families' purchasing power. True, interest rates are currently low, but the spread on mortgages and loans is at unprecedented levels: Banks are dumping the costs of the crisis and of their speculative operations on citizens and business. Therefore, in order to avoid repeating the dramatic mistakes of the last 20 years and to protect the real economy from finance, we need to separate investment banking activities and establish clear distinctions of stock ownership as well as of management, and even a different tax system that benefits traditional banks with respect to investment banks."