Top WH advisor supports move to break up big banks

Mar 2012
New Hampshire
White House economic adviser Gary Cohn told lawmakers this week that he supports a potential breakup of the country's big banks, a step that would force a sweeping restructuring of the way Wall Street works.

The issue emerged in a meeting between Cohn, the head of the powerful National Economic Council, and several members of the Senate Banking Committee earlier on Wednesday. Sen. Elizabeth Warren (D -Mass.), a longtime critic of Wall Street, asked Cohn whether the Trump administration planned to follow through with a campaign promise to separate traditional commercial banking from Wall Street investment banking, according to two people briefed on the conversation who spoke on the condition of anonymity because they were not authorized to discuss the private get-together.

Cohn said he was open to those discussions, which would largely revolve around a revival of the Glass-Steagall Act, a Depression-era law that restricted the kinds of activities banks could engage in. The meeting was reported earlier by Bloomberg News. While the Republican 2016 platform called for bringing back Glass Steagall, the banking industry has largely played down the possibility. The idea is popular among many Democrats, but some Republicans have said it would be an unnecessary burden on the financial sector.

Cohn's statements rattled some industry insiders, who said it appeared to show the White House may be more serious about the idea than they initially thought.
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