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STEVEN MNUCHIN GOES THROUGH THE LOOKING GLASS-STEAGALL IN STRANGE EXCHANGE WITH ELIZABETH WARREN

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https://theintercept.com/2017/05/18/steven-mnuchin-goes-through-the-looking-glass-steagall-in-strange-exchange-with-elizabeth-warren/?comments=1#comments

"SEN. ELIZABETH WARREN had a confounding exchange with Treasury Secretary Steven Mnuchin at a Senate Banking Committee hearing today. Mnuchin indicated that the Trump administration supports a 21st century version of the Glass-Steagall Act, except for the part about separating commercial and investment banks, which is substantially what is meant by Glass-Steagall.

Warren wasn’t having it.

Responding to Mnuchin’s earlier testimony that the White House didn’t support “a separation of banks from investment banks,” the Massachusetts senator pointed out that “The president and this administration have repeatedly said that they support a 21st century Glass-Steagall.”

Indeed, Mnuchin said these words in his confirmation hearings. National Economic Director Gary Cohn has said the same. And the 2016 Republican Party platform adds explicitly, “We support reinstating the Glass-Steagall Act of 1933 which prohibits commercial banks from engaging in high-risk investment.” As Warren said to Mnuchin, “Now you’ve just said the opposite.”

Mnuchin responded that there wasn’t any reversal, despite Warren’s incredulity. He said that the administration merely supported a 21st century version of the law. “Which means there are aspects of it, OK, that we think may make sense. But we never said before that we supported a full separation —”

“There are aspects of Glass-Steagall that you support but not breaking up the banks and separating commercial banking from investment banking?” Warren interrupted. “What do you think Glass-Steagall was if that’s not right at the heart of it?”

While the Glass-Steagall Act was part of a larger bill, the Banking Act of 1933, which also created the Federal Deposit Insurance Corporation, for about 80 years it’s been pretty clear that “Glass-Steagall” refers to the firewall between commercial and investment banking. There are no real “aspects” of the policy to pick from without that fundamental structure..."

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