During election 2016, candidate Donald Trump made some progressives very happy with the suggestion that he would be looking to reintroduce Glass-Steagal, the eponymous banking bill that helped split up investment banking from commercial banking, something that helped prevent a replay of the Great Depression for nearly 70 years. Republicans even codified Mr. Trump’s vision for Glass-Steagall’s reintroduction by placing it in their 2016 platform.
However, now Trump is pretending that he never made this promise.
“We think that would have a very significant problem on financial markets, on the economy, on liquidity,” said Trump’s Secretary of the Treasury Steve Mnuchin. He continued, “we do think there are potential things we could look at around regulation but we do not support separation of banks and investment banks…that means there are aspects of it that we think may make sense, but we never said before that we supported a full separation of banks and investment banks.”
In 1999, President Bill Clinton signed the Gramm–Leach–Bliley Act, a law that repealed Glass-Steagall.
In 2008, the world saw the danger that came with concentrating too much power into the banking behemoths that arose following Glass-Steagall’s repeal. The interdependence of these banks (for a number of reasons) nearly led to a domino-like collapse of the financial system.