When the Democratic candidates for president spent several minutes debating the repeal of the Glass-Steagall banking law during last week’s debate, they were speaking Sen. Sherrod Brown’s language.
The 1933 banking law was repealed in 1999. Crafted during the Great Depression, it aimed to keep commercial banks from getting involved in investment banking and insurance, meaning banks could either deal with Main Street or Wall Street.
Brown, D-Ohio, is the ranking member of the Senate Banking Committee, and on that committee he’s spent an inordinate amount of time pondering what role the repeal of that law had in the financial meltdown that followed.
His conclusion: the repeal, while “clearly a mistake, probably wasn’t the main cause. It was a cause, but it wasn’t the main cause of what happened.”
Brown blames further deregulation of big banks and the failure of regulators. He has called for higher capital standards and for Congress to address the risk in the financial system.
Brown has not endorsed any of the Democratic candidates for president, but he said he talks to Sanders regularly –both are members of the Senate – and that he spoke to former Secretary of State Hillary Clinton’s aides while she developed her banking plan. “I think she’s on the right track,” he said.
But Sanders wants to reimpose Glass-Steagall, and Clinton does not. Does Brown favor one route?
“I think it’s easy to say imposing Glass-Steagall will solve our problems,” he said. “But it’s only part of the solution.”