Stories

Shannon Vavra Apr 6, 2017
SaveSave story

Cohn supports breaking up big banks

Andrew Harnik / AP

In a private meeting Wednesday with Senate Banking Committee members, Gary Cohn, Trump's top economic advisor, said he generally favors breaking up big US banks, per Bloomberg. In other words, the former Goldman Sachs president supports a separation between firms that trade and underwrite securities and firms that issue loans.

Quick take: The Glass-Steagall Act, passed in the Depression-era and repealed in 1999, might be coming back. With Cohn not putting up a fight against reinstating the act, there is no one left in Trump's inner circle to prevent it, per the WSJ.

Why it matters: The repeal in 1999 allowed big Wall Street firms to overtake rivals and package up several financial services into one-stop-shops. And many Americans are still frustrated over the $700 billion bailout Americans paid for the banks in the aftermath of the 2008 financial crisis.

It's bipartisan... GOP and Democratic platforms both called for it to be reinstated in some form, and Trump called for the creation of a "21st century Glass-Steagall." But… Congress might be too entangled in current legislative issues like health care and tax reform to shift focus to this issue.