Here's a key call-out from our new Financials analyst, Joshua Steiner:
This morning Senators John McCain (R-AZ) and Maria Cantwell (D-WA) are floating a bipartisan bill aimed at reinstating Glass-Steagall. Under their proposal, firms operating with both commercial and investment banking businesses would be given one year from the date of passage to separate the commercial and investment banking sides of the business into separate companies. The bill would also preclude commercial banks from operating in any sort of insurance capacity, requiring affiliated insurance businesses be separated as well.
The proposal comes on the heels of similar efforts to amend the House Financial Services Stability Improvement Act a few weeks back. Passage in the Senate will be an uphill battle, and while a similar amendment failed to escape committee in the House, we think it amounts to another log on the fire of calls for financial reform.
Once Healthcare has moved off the front burner early next year, we expect financial reform to take center stage, with the threat of Glass-Steagall likely being the bargaining chip to get tougher rules/regs through.