Travis Martinez, University of New Mexico/Talk Radio News Service
Senators Maria Cantwell (D-Wash.) and John McCain (R-Ariz.) introduced bipartisan legislation Wednesday that would prohibit commercial banks from affiliating themselves in any manner with investment banks or securities firms.
The Banking Integrity Act of 2009 would restore 1933 legislation, repealed in 1999 under legislation guided by former Sen. Phil Gramm (R-Texas), to establish a wall between commercial and investment banking to help protect depositors' money from being put at risk by Wall Street speculation.
"I'm sure that Senator Gramm probably does not agree with this legislation. It doesn't change our relationship, we just don't agree," said McCain.
“For nearly 60 years, a firewall maintained the integrity of banking systems; preventing self-dealing and other financial abuses; and limited stock market speculation,” said Cantwell during a press conference. “Our bill would return that firewall.”
Under Cantwell-McCain, major financial firms currently operating as both commercial banks and investment houses would have to make a decision on whether to focus on commercial or investment banking.
“I want to ensure that we never stick the American taxpayer with another $700 billion or even larger tab to bailout the financial industry. It is time to put a stop to the taxpayer financed excesses of Wall Street,” said McCain.
McCain brushed off concerns that Gramm, who served as a campaign adviser for the Arizona senator's 2008 presidential campaign, would be troubled by the move to sweep away his legislative accomplishments.
New Bill Will Separate Commercial And Investment Banks
Senators Maria Cantwell (D-Wash.) and John McCain (R-Ariz.) introduced bipartisan legislation Wednesday that would prohibit commercial banks from affiliating themselves in any manner with investment banks or securities firms.
The Banking Integrity Act of 2009 would restore 1933 legislation, repealed in 1999 under legislation guided by former Sen. Phil Gramm (R-Texas), to establish a wall between commercial and investment banking to help protect depositors' money from being put at risk by Wall Street speculation.
"I'm sure that Senator Gramm probably does not agree with this legislation. It doesn't change our relationship, we just don't agree," said McCain.
“For nearly 60 years, a firewall maintained the integrity of banking systems; preventing self-dealing and other financial abuses; and limited stock market speculation,” said Cantwell during a press conference. “Our bill would return that firewall.”
Under Cantwell-McCain, major financial firms currently operating as both commercial banks and investment houses would have to make a decision on whether to focus on commercial or investment banking.
“I want to ensure that we never stick the American taxpayer with another $700 billion or even larger tab to bailout the financial industry. It is time to put a stop to the taxpayer financed excesses of Wall Street,” said McCain.
McCain brushed off concerns that Gramm, who served as a campaign adviser for the Arizona senator's 2008 presidential campaign, would be troubled by the move to sweep away his legislative accomplishments.