WASHINGTON Sen. Elizabeth Warren and her colleagues are working to drum up support for a new bipartisan bill that would bring back a Depression-era law separating commercial and investment banks.
The Massachusetts Democrat spoke on the Senate floor Thursday evening about her aims for the bill and her ongoing concerns about the state of the banking system in the wake of the financial crisis.
"Despite the progress that's been made, the biggest banks continue to threaten the economy," she said. "The idea behind the bill is simple banking should be boring. Anyone who wants to take risks should go to Wall Street and stay away from the basic banking system."
The 21st-Century Glass-Steagall Act, introduced by Warren along with Sens. John McCain, R-Ariz., Maria Cantwell, D-Wash., and Angus King, I-Maine, earlier on Thursday, would separate institutions with savings and checking accounts from those engaged in other activities, such as investment banking or swaps trading.
Banks engaged in those kinds of businesses "won't be able to rely on federal deposit insurance for their high-risk activity," Warren said.
The freshman senator warned that the bill won't end "too big to fail," but she said it will "make institutions smaller and safer and move us in the right direction."
McCain also spoke out on the chamber floor Thursday night, criticizing the "culture of greed and excessive risk" in banking and urging his colleagues to support the bill.
The original Glass-Steagall Act was repealed in 1999, opening the door for commercial and banking businesses to merge and grow.
"When these worlds collided, the investment banking culture prevailed," said McCain.
