Former President Bill Clinton defended his decision to repeal the Depression-era regulation on banking known as Glass-Steagall that splits up large financial institutions and was championed by the liberals.
Politicians following the financial crash fear anything they do is going to be held against them later if something bad happens, Clinton said during an interview.
He cited all the grief he received for signing that legislation that put an end to Glass-Steagall, There is not a solitary example that had something to do with the country’s financial crash.
Senator Bernie Sanders a presidential candidate, who calls himself a Democratic socialist and Martin O’Malley the former governor of Maryland have supported the reinstating of the policy. The policy would require the big banks to divide their investment and commercial practices.
Hillary Clinton the frontrunner from the Democratic Party for the presidential nomination declined to take any position on the former policy while campaigning last month in South Carolina.
She called the issue much more complicated than pointing at one piece of legislation and saying if we passed it than everything would then be fine, when she was asked her opinion on Glass-Steagall. It is far more complicated than just one measure might suggest.
The majority of economists from the Federal Reserve Bank agree the repeal by President Clinton of the policy back in 1999 did not contribute to the financial crash nearly 9 years later.
Nevertheless, Glass-Steagall has become a wedge politically for the Democrats of recent, especially since Senators Elizabeth Warren a Democrat from Massachusetts and John McCain a Republican from Arizona reintroduced it in the upper chamber.
Former President Bill Clinton said he could support the tweaking of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, particularly on the impacts for community banks, which have lobbied for many years that the regulations that are applied to large banks should not apply to them.
Clinton added that there should be a long look at the impact of the Dodd-Frank legislation on community banks.
He also said the U.S. should think about looking at the way banks in Canada are regulated. In Canada, there was no financial crisis, he added, and they always had commercial and investment banking under a single roof, but different rules governed each.