Elizabeth Warren Slams 'weird' Glass-Steagall Statements From Trump's Treasury Secretary



WASHINGTON ― The Trump administration showed its now routine sense for the absurd when Treasury Secretary Steven Mnuchin testified before the Senate Banking Committee on Thursday.

The treasury secretary said the administration supports a 21st-century version of the Glass-Steagall Act, while oddly saying at the same time it doesn’t support the legislation’s stated definition.

Sen. Elizabeth Warren (D-Mass.) the lead sponsor of bipartisan legislation the 21st Century Glass-Steagall Act of 2017, which refers to an updated version of the the Depression-era regulation that separated commercial and investment banks, grilled Mnuchin on his statements.

“The Republican platform did bear Glass-Steagall,” Mnuchin said in response to a question from Warren asking whether he was reversing the administration’s preceding position. “We, during the campaign … had the opportunity to work with on this specifically, came out and said we carry out support a 21st century Glass-Steagall. Which is … there are aspects of it, okay, that we deem may develop sense. But we never said before that we supported a full separation of banks and investment banks.

Warren, incredulous, responded, “There are aspects of Glass-Steagall that you support, but not breaking up the banks and separating commercial banking from investment banking? What carry out you deem Glass-Steagall was whether that’s not right at the heart of it?”

Even though the 2016 Republican Party platform very specifically stated, “We support reinstating the Glass-Steagall Act of 1933 which prohibits commercial banks from engaging in high-risk investment.”

Mnuchin maintained on Thursday that when he says he supports a 21st century Glass-Steagall that does not mean he supports the Glass-Steagall’s separation of commercial and investment banking, adding that the administration also didn’t want to bring back the law.

This is like something straight out of George Orwell.
Sen. Elizabeth Warren

 But in October, during the campaign trail then-candidate Donald Trump did say, “It’s time for 21st century Glass-Steagall.” But he did not elaborate on what this would glimpse like.

In the recent months, both Trump and his top economic adviser Gary Cohn, a former Goldman Sachs banker, said the administration was open to reviving the Glass-Steagall Act.

And Mnuchin himself said in January, “We need a 21st century Glass-Steagall.”

Despite Warren’s interrogation, Mnuchin refused to clarify the 21st century Glass-Steagall Act that he said the administration did support.

“Let me score this straight,” Warren said. “You’re saying that you are in favor of Glass-Steagall, which breaks apart the two arms of banking, regular banking and commercial banking. apart from you don’t want to rupture apart the two parts of banking. This is like something straight out of George Orwell.”

“This is just weird,” she added later. Mnuchin insisted on responding that the Trump administration policies “couldn’t be clearer.”

Glass-Steagall was repealed in 1999 by a Republican Congress and former President Bill Clinton.

After it was repealed, the 1998 merger between commercial bank Citigroup and investment bank Travelers was retroactively approved, the investment bank JPMorgan merged with the commercial bank Chase in 2000, and much of the industry followed suit. Most of the country’s largest, too-gargantuan-to-fail banks now bear both commercial banks that carry out things like grasp deposits and develop loans, and investment banks that trade and underwrite securities.  

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