New York (HedgeCo.Net) – A of group of U.S. senators led by senior United States Senator Elizabeth Warren, yesterday introduced legislation that would break up Wall Street’s megabanks by separating traditional banking activity from riskier financial services such as investment banking, insurance, swaps dealing, and hedge fund and private equity activities.
“The government should NOT be insuring hedge funds, swaps dealing, and other risky investment banking services. When the same institutions that take huge risks are also the ones that control your savings account, the entire banking system is riskier.” Warren said in a press release yesterday. “Now it’s time to launch the next push. I joined forces with Senators John McCain, Angus King, and Maria Cantwell to introduce the 21st Century Glass-Steagall Act of 2013 to reinstate and modernize core banking protections.”
The bill would clarify regulatory interpretations of banking law provisions that undermined the protections under the original Glass-Steagall and would make ‘Too Big to Fail’ institutions smaller and safer, minimizing the likelihood of a government bailout.
“Banking should be boring. Savings accounts, checking accounts — the things that you and I rely on every day — should be safe from the sort of high-risk activities that broke our economy.” Warren said.
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