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Citizens Electoral Council of Australia

Media Release  Thursday, 9 July 2015

Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 1800 636 432
Email: cec@cecaust.com.au
Website: http://cec.cecaust.com.au
 

Global too-big-to-fail banks on notice: US Senators introduce 21st Century Glass-Steagall Act

The City of London and Wall Street’s worst nightmare is coming true, now that four US Senators have introduced the 21st Century Glass-Steagall Act into the Senate, ensuring that Glass-Steagall will be the defining issue of the US Presidential election.

On 7 July Senators John McCain, Elizabeth Warren, Maria Cantwell and Angus King reintroduced into the new Senate their existing legislation to restore Franklin Roosevelt’s strict separation of commercial banking that services the daily economy, from speculative and risky investment banking; this separation was originally legislated in the 1933 Glass-Steagall Act, and successfully averted any major banking crises until its repeal in 1999.

Those bankers and politicians who conspired in 1999 to scrap Glass-Steagall should have learnt their lesson when the global financial system melted down in 2008, under the weight of over a quadrillion dollars of bad derivatives bets; this scale of betting was only possible because the banks had been let off the Glass-Steagall leash. Indeed, some of the conspirators involved in the 1999 repeal, including former Citibank chairman Sandy Weill—known as the “shatterer of Glass-Steagall”—and former Citibank CEO John Reed, did learn the lesson and have loudly called for its reintroduction.

For six years, however, the restoration of Glass-Steagall has been blocked—by President Barack Obama. Obama has slavishly served Wall Street and the City of London, staffing his administration with Wall Street agents who ensured the banks would not be brought to justice for their crimes that caused the 2008 crisis and protected them from any serious restrictions on their gambling. For instance, Obama’s choice for his first Attorney-General, Eric Holder, had previously engineered a shift in the Department of Justice’s policy, arguing in a 1999 memo called “Collateral Consequences” that in deciding whether to prosecute banking crimes, prosecutors should take into account the knock-on effect on markets and shareholders, i.e. they should let bankers off the hook lest the fallout hurt their share price and the finanacial markets. Then from 2001-2009 Holder worked for top Wall Street law firm Covington & Burling, representing the biggest banks. After six years as AG, letting his former clients off scot-free, Holder has now returned to Covington & Burling—where, it has now emerged, the firm kept an office free for him the whole time; in effect, he never left. Under Holder and Obama, Wall Street banks became both too big to fail and too big to jail.

But now, thanks to this bill, unlike when Obama ran his deceptive campaign in 2008, the US presidential candidates will be forced to address the issue of Glass-Steagall, and explain to the American voters, who are still suffering for the crimes of the banks, whether they support restoring the most effective banking regulation in history, or whether they will serve Wall Street and let the banks continue to get away with financial murder. If the Murdoch and other corporate-controlled media outlets do not succeed in suppressing the debate, the candidates will soon see what the American people demand—Glass-Steagall.

Wall Street’s hysteria can be seen in this 2 June clip from the Fox Business channel, in response to former Maryland Governor Martin O’Malley’s campaign for the Democratic Party’s nomination for president, on a Glass-Steagall platform; the Fox News correspondent calls O’Malley Wall Street’s “public enemy number one” for demanding Glass-Steagall.

The CEC is leading the fight for a total Glass-Steagall separation of Australia’s own TBTF banks, before the next global financial meltdown obliterates the life savings of the Australian people who currently have no protection from the inevitable fallout of the Big Four banks’ unbridled derivatives gambling. This is a global effort, and it has never been more urgent. Join the fight!

Click here for a free copy of the CEC’s weekly magazine, the Australian Alert Service, which reports the most crucial strategic and economic developments affecting Australia and the world, including the impending financial crash and the fight for Glass-Steagall.

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All electoral content is authorised by National Secretary, Craig Isherwood, 595 Sydney Rd, Coburg VIC 3058.