Citizens Electoral Council of Australia

Media Release Friday, 10 March 2017

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

Mere mention of Glass-Steagall spooks Wall Street and London

Donald Trump’s spokesman Sean Spicer confirmed today that the US President is still committed to a Glass-Steagall separation of commercial banks with deposits, from investment banks that speculate.

Click here to watch C-Span’s coverage of Spicer’s answer to Newsmax’s John Gizzi, who asked Spicer if Trump would work with Senator Bernie Sanders on restoring Glass-Steagall, and if Trump remained committed to restoring it.

London’s Financial Times reported that Spicer’s confirmation of Trump’s support for Glass-Steagall spooked the banks on Wall Street: “Bank stocks slip as White House confirms intent to revisit Glass-Steagall”.

“Financials don’t seem too happy to hear that bringing back Glass-Steagall is still on President Donald Trump’s policy to-do list”, FT reported. “In response to a question on Thursday about whether Mr Trump remains committed to a campaign promise to revisit the Great Depression era law—which prohibited commercial deposit-holding banks from engaging in riskier investment banking activities—White House press secretary Sean Spicer said that he was.

“US bank shares trimmed their advance on the back of Mr Spicer’s answer. The S&P 500 banks index, which tracks the largest American lenders, cut its gain to 0.5 per cent from 0.8 per cent.”

FT’s rush to cover this development underscores how the City of London is equally sensitive to any discussion about Glass-Steagall, which would put an end to Too-Big-To-Fail banks using the deposits of their customers to underwrite their derivatives gambling bets, which add up to hundreds of trillions of dollars and pounds.

Glass-Steagall for Australia

Glass-Steagall equally scares Australia’s banks, and the politicians that are in their pockets. Australia’s Big Four TBTF banks are rapidly becoming the most derivatives-addicted banks in the world.

Derivatives are bets on interest rates, currency exchange rates, and financial markets, and complex combinations thereof. They are often fraudulent and designed to get around regulations intended to stop financial institutions from taking risks that would put their customers in danger of losing their investments.

The exposure of Australia’s banks, especially the Big Four, to these risky and toxic financial bets is skyrocketing by trillions of dollars per year. Since the 2008 financial crisis Australian bank derivatives has increased by more than 160 per cent, from $14 trillion to $36 trillion.

Click here to see the CEC’s latest charts tracking derivatives gambling in the Australian banking system.

Last year NAB, the biggest derivatives gambler, suddenly stopped disclosing its true derivatives position. CBA started hiding its true derivatives exposure in 2012. The Big Four banks hold around 80 per cent of the deposits of Australians. It is a scandal that APRA and the government allow the banks to hide their most risky activity in this way.

The CEC is running the following petition on change.org to get Glass-Steagall passed in Australia, to stop the banks from gambling with deposits by splitting them up.

Petition to Parliament
Break up the big banks now—pass Glass-Steagall!
To the Honourable The Speaker and Members of the House of Representatives assembled:
This petition of the Citizens Electoral Council draws to the attention of the House that even such institutions as the IMF, the Bank for International Settlements, and the US Federal Reserve are now warning of a new, far more severe financial crash than that of 2008.
Transatlantic and Commonwealth governments have bailed out the Too-Big-to-Fail (TBTF) banks with US$19 trillion since 2008, virtually all of which has been used for speculation; the banks are now 40 per cent larger; and the derivatives exposure of Australia’s own banks has soared from $14 trillion in 2008 to $38 trillion now. Moreover, these TBTF banks have repeatedly been caught in criminal activity like drug-money laundering, terrorism financing, mortgage fraud, interest rate and exchange rate rigging, and more.
The world must replace this disastrous, corrupt system now, before the next crash. We the undersigned therefore call on the House to do Australia’s part, and legislate the following:

a full Glass-Steagall separation of Australia’s banks to protect normal commercial banking and deposits from the wild speculation of today’s TBTF banks;
a national bank modelled on the original Commonwealth Bank to create massive new credits to revive our manufacturing, agricultural and other productive industries;
a program of major water, power and transportation infrastructure projects, in Australia and in our region, cooperating with China’s “One Belt, One Road” program—in which 100 nations are already participating—to spur global economic recovery and provide for an enduring peace.

Click here to sign the petition: https://www.change.org/p/break-up-the-big-banks-now-pass-glass-steagall

Please share this release with your friends, family and associates, contacts and mailing list, and urge them to also sign the petition.

If you support the Glass-Steagall petition and would like to be kept updated on this fight, click here for updates and a free copy of the CEC’s 2014 72-page pamphlet Glass-Steagall Now!

Click here to join the CEC as a member.

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