Keeping My Fingers Crossed

If this really happens, I suspect we will see a restoration of sanity on Wall Street, with an improving economic situation for Main Street. Not immediately, obviously. This is a long-term move that would keep our economy from experiencing the consequences that results from the rash impulsiveness of the investor class.

Dec. 28 (Bloomberg) -- A one-page proposal gaining traction in Congress could turn back the clock on Wall Street 10 years, forcing the breakup of banks, including Citigroup Inc.

Lawmakers in both parties, seeking to prevent future financial crises while soothing public anger over bailouts and bonuses, are turning to an approach that's both simple and transformative: re-imposing sections of the 1933 Glass-Steagall Act that separated commercial and investment banking.

Those walls came down with passage of the Gramm-Leach- Bliley Act of 1999. A proposal to reconstruct them, made by U.S. Senators John McCain and Maria Cantwell on Dec. 16, would prevent deposit-taking banks from underwriting securities, engaging in proprietary trading, selling insurance or owning retail brokerages. The bill could also force the unwinding of deals consummated during the financial crisis, including Bank of America Corp.'s acquisition of Merrill Lynch & Co.

Hat Tip: Susie Madrak via C&L