WASHINGTON, July 17 – Sen. Bernie Sanders (I-Vt.) said today he strongly supports a bill by Sen. Elizabeth Warren (D-Mass.) to reinstate the post-Depression Glass-Steagall Act which regulated the financial services industry.
“We not only must reinstate this important law, but we also have to break up the too-big-to-fail financial institutions in this country. If an institution is too big to fail, it is too big to exist.
Sanders in 1999 led House opponents of the Wall Street-backed push to repeal the law.
“I was proud to lead the fight in the House against repealing the Glass-Steagall Act. I predicted then that such a massive deregulation of the financial services industry would seriously harm the economy. I would give anything to have been proven wrong about this, but unfortunately what happened to the economy during the financial collapse of 2008 was even worse than I predicted,” Sanders said.
As Congress debated the bill to allow the merger of commercial banks, investment banks and insurance companies, Sanders spoke out against it on the House floor.
According to the Congressional Record for July 1, 1999, then Rep. Sanders said: “I believe this legislation, in its current form, will do more harm than good. It will lead to fewer banks and financial service providers; increased charges and fees for individual consumers and small businesses; diminished credit for rural America; and taxpayer exposure to potential losses should a financial conglomerate fail. It will lead to more mega-mergers; a small number of corporations dominating the financial service industry; and further concentration of economic power in our country.”
Looking back today, Sanders said that allowing commercial banks to merge with investment banks and insurance companies in 1999 was a huge mistake.
“It precipitated the largest taxpayer bailout in the history of the world. It caused millions of Americans to lose their jobs, homes, life savings and ability to send their kids to college. It substantially increased wealth and income inequality. And it led to the enormous concentration of economic power in this country.”