Elizabeth Warren: Glass-Steagall Is The Slingshot That Can Bring Down Goliath

September 13, 2013 • 10:26AM

Sen. Elizabeth Warren (D-MA), the lead sponsor of the 21st Century Glass-Steagall bill S. 1282, addressed the Better Markets group of economists and George Washington Law School faculty, today, on lessons of the 2008 crisis and the Glass-Steagall solution.

Sen. Warren noted the occasion of the forum: five years since the Wall Street meltdown, which had brought staggering financial and real costs (over $14 trillion, $120,000 for every household) to Americans. Yet Sen. Warren characterized Dodd-Frank as "a strong bill" she "would have voted for twice" [had she been a Senator], showing a weakness for negotiation, and later, a lack of a sense of urgency. Today, Sen. Warren said, "the five largest banks hold more than half the total banking assets in the country. Various financial agencies have missed more than 60% of the Dodd-Frank deadlines... Since when does Congress set deadlines, watch regulators miss most of them, and then take that failure as a reason not to act?"

That, said Warren, is the reason she partnered with Sens. John McCain, Maria Cantwell, and Angus King to offer up "one potential way to address the Too Big to Fail problem — the 21st Century Glass-Steagall Act... [which would] reinstate many of the protections found in the original Glass-Steagall Act." The new Glass-Steagall Act "would attack both 'too big' and 'to fail.' This is one way to deal with Too Big to Fail, and I think it would work. But there are other approaches, too. So, what I want to know is this: how much longer should Congress wait for regulators to fix this problem? Another 3 months? Another 3 years? Until the next big bank comes crashing down?"

Warren concluded: "I am confident David can beat Goliath on 'Too Big to Fail.' We just have to pick up the slingshot again."