Mnuchin: No breaking up banks

Jon Howard
May 20, 2017

Van Hollen, who led Democratic senators in sending a scolding letter to Mnuchin about Noreika's appointment, said at the hearing that the move "evaded Senate confirmation". Mnuchin said he reviewed cases at the Committee on Foreign Investment in the United States every week.

But Mnuchin said Thursday a modern Glass-Steagall wouldn't include breaking up banks.

And, in performing its economic and reform agendas, the administration of U.S. President Trump has made slow progress and is now facing a probe by special counsel into an accomplished agreement between campaign team and Russian Federation.

While reviving Glass-Steagall would be a drastic step, lawmakers on both sides of the aisle have argued it might be the best way to prevent banks from becoming so large that they endanger the financial system.

Mnuchin reiterated that the administration favored a "21st-century Glass-Steagall", not the original Glass-Steagall. "There are aspects of [of Glass-Steagall] that may make sense", he said.

WARREN: Let me stop you right there, Mr. Secretary.

Mnuchin replied by saying he had checked to make sure "my staff had fully responded to all the inquiries from you and the committee, and I believe we have".

"This is just freaky. this is insane".

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Treasury Secretary Steven Mnuchin's assertion that the administration doesn't support separating commercial banking from investment banking, as was the case under the Depression-era Glass-Steagall Act, nearly left Sen. Elizabeth Warren has been backing legislation with the same name for three years.

MNUCHIN: I apologize that I was not aware of that.

"The idea that you can say you are in favor of Glass-Steagall but not breaking up the banks, this is like something straight out of George Orwell", Warren said. He said he didn't realize that was the title of a bill that Warren and other senators have introduced this year. "I hope today will give us an opportunity for more forthright conversations". What does it mean to be in favor of 21st Century Glass-Steagall, if it does not mean breaking apart these two functions in banking?

Warren told reporters that she was "stunned" at the administration's reversal. I had not realized that your bill was named the 21st Century Glass-Steagall. It's an easy question - or an impossible question. Or an impossible question.

Mnuchin offered to visit Warren "and follow up and talk about this".

But Democrats weren't happy with many of Mnuchin's answers. "But we do not support a separation of banks and investment banks". "We think that would be a big mistake".

Mnuchin did not detail exactly what portions of the law he thought should return, and the party's official platform simply called for a full reinstatement of the former law. "We do think there are potential things we could look at around regulation, but we do not support separation of banks and investment banks".

"We have been working hard at the Treasury to develop and implement policy that will allow the economy to grow", Mnuchin said. It couldn't be clearer.

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