Sens. Maria Cantwell (D-WA) and John McCain (R-AZ) have introduced legislation that reinstates the division between commercial banks and investment banks.
The Banking Integrity Act of 2009 seeks to repeal Gramm-Leach-Bliley Act of 1999, which removed decades-old provisions barring the combination of disparate financial services firms. The legislation also prohibits commercial banks from engaging in “all insurance activities.” Cantwell and McCain say the bill is intended to thwart systemic risk.
“My reasons for joining this effort are simple—I want to ensure that we never stick the American taxpayer with another $700 billion—or even larger—tab to bailout the financial industry,” McCain said in a statement. “If big Wall Street institutions want to take part in risky transactions—fine. But we should not allow them to do so with federally insured deposits.”
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