The Glass-Steagall Four: "We need to rein in 'too big to fail' banks"
July 17, 2014 • 11:24AM

This morning, CNN posted an article written by Senators Warren, (D-MA), McCain (R-AZ), Cantwell (D-WA), and King (I-ME), entitled: "We need to rein in 'too big to fail' banks".

The trans-Atlantic financial system is on the verge of an imminent collapse, as Lyndon LaRouche has been warning, and the British Empire have been attempting to stoke a World War situation, in any number of hot-spots around the globe: Ukraine, Iraq, Syria, etc. It is in such a context, that the LaRouchePAC has been mobilizing for the impeachment of the British stooge, Barack Obama, and the immediate implementation of Lyndon LaRouche's four point recovery program.

Senators Warren, McCain, Cantwell and King

With this in view, this article is an escalation by the leading four Senators who are pushing for Glass-Steagall legislation, and a timely one at that.

The article begins by reviewing how, "more than five years after the bankruptcy of Lehman Brothers and the beginning of the most severe economic downturn since the Great Depression, lawmakers should ask themselves whether they have done enough to reduce the risk of another financial crisis. In our view, the answer is no."

The Senators then go on to identify several instances, such as the London whale trade, and so on, saying, "That episode was yet another reminder that banks continue to engage in risky conduct and that regulators continue to lack the tools and willingness to stop such conduct before it happens. That's why we co-sponsored the 21st Century Glass-Steagall Act. The Act, which we first introduced a year ago last week, would separate traditional banks that offer checking and savings accounts from riskier financial services, such as investment banking and swaps dealing.

It would encourage financial institutions to shrink to manageable sizes and eliminate their ability to rely on federal depository insurance as a backstop for high-risk activities. It would make banks smaller and less complex.

This proactive, structural approach to reducing bank risk should be far preferable to risk-management through over-regulation. Although a new Glass-Steagall Act would not resolve the "too big to fail" problem entirely, reinstating and strengthening the wall between federally insured commercial banks and investment banks would discourage the largest financial institutions from exploiting regulatory loopholes in order to take excessive risks at taxpayer expense....

Congress must step in. We owe the American people as much. The real cost of the financial crisis was borne, and is still being borne, by the men, women, families, small businesses, and communities in America — American taxpayers. A report by the Federal Reserve Bank of Dallas estimated that the financial crisis cost us as much as $14 trillion. That's $120,000 for every American household — more than two years' worth of income for the average family.

The big Wall Street banks continue to hum along as they did before the crisis — too big to fail and, in many cases, potentially exposing the economy to the risk of systemic failure. That would, needless to say, be devastating. Which leads to the last question lawmakers should ask themselves: More than five years later, with another financial crisis a very real possibility, why isn't this a more urgent issue? We urge our colleagues to support our bill.

For the full article, go here.