LIke Rip Van Winkle waking from a long sleep, the Silicon Valley Bank meltdown and other bank crises on both sides of the Atlantic seem to have reminded people about Glass-Steagall and banking separation. For example, in the March 16 hearing in the U.S. Senate, Maria Cantwell (D-WA)—a long-time proponent of Glass-Steagall legislation—asked Treasury Secretary Janet Yellen about the prospects of reviving the FDR-era bill, which was dismantled in 1999.
Yellen, no advocate of economic sanity, to be sure, at least didn’t shoot the idea down immediately. “I think there will be plenty of time [when] it will be appropriate to look at what happened and consider whether or not regulatory or supervisory changes are necessary. I look forward to working with you when discussing what happened and what response is appropriate,” Yellen told Cantwell. “But for now, I would like to see confidence restored in the soundness of America,” she said.
In Switzerland, Peter Burkhardt, economic editor of the Tamedia group, called for bank separation in an article in the Berner Zeitung yesterday. He challenged the proposition that Credit Suisse is “too big to fail,” and listed a series of measures to be taken, including: “Asset management and commercial banks should be separated from investment banks. Such a separation banking system was even propagated by former UBS Chairman Peter Kurer. A few years ago, it was adopted in the National Council with votes from the [Swiss People’s Party] SVP, [Social Democrats] SP and Greens—and then scuttled in the Council of States.” (https://www.bernerzeitung.ch/wir-alle-zahlen-fuer-die-fehler-der-banken-diese-gratiskultur-muss-ein-ende-haben-555451673514)
