European Business Group Calls for Glass-Steagall
March 26, 2013 • 12:04PM

"Europe's 500," an association of new European firms and "growth companies" which just held its annual conference in Brussels March 20-21, put out a post-conference release March 24 in which it calls for Glass-Steagall bank separation.

The release describing the "Europe's 500" conference, circulated through PRNewsMax, includes a five-point "program" the conference decided to promote. The fifth point is:

"Glass-Steagall should redefine the distinction of investment and commercial banks.

"Europe's 500 recommends that: ECB funded government bonds on bank balance sheets should be separated into another entity from the commercial banks in order not to adversely impact the real economy with governmental monetary measures. Commercial bank managers need to refocus on profits with midsize companies without these indirect subsidies from risk-free government bond margins."

The additional point being addressed here is that under the U.S. Glass-Steagall Act, commercial banks which are prevented from investing and dealing in securities, are permitted to hold U.S. Treasury securities and certain Treasury-guaranteed securities without limit. These are designated "bank-qualified securities" under Glass-Steagall. The "Europe's 500" business group is defining ECB-backed sovereign debt as being "non-bank-qualified" in this crisis.