WASHINGTON — Massachusetts Senator Elizabeth Warren continued her crusade against the “Goliath’’ banks of Wall Street on Tuesday, saying not enough has been done to protect the middle class in the wake of the 2008 recession.
In a speech to the Americans for Financial Reform and the Roosevelt Institute, Warren took large swings at both the Obama administration and Congress for not following up when regulators missed deadlines to impose new regulations under the 2010 Dodd-Frank legislation.
“Who would have thought five years ago, after we witnessed firsthand the dangers of an overly concentrated financial system, that the ‘Too Big To Fail’ problem would only have gotten worse?’’ Warren asked.
Warren then trumpeted her latest attempt to reign in the banking industry — the 21st Century Glass-Steagall Act — as the solution. This bipartisan bill, co-authored by Republican Senator John McCain, would address dismantle the largest banks and make “banking boring’’ by reducing the scope of activities banks could engage in, providing discipline and stability to the financial system, Warren said.
“Now sure, the lobbyists for Wall Street say the sky will fall if they can’t use deposits in checking accounts to fund their high-risk activities,’’ the Massachusetts senator said. “But they said that in the 1930’s, too.’’
The original Glass–Steagall Act was implemented in 1933 to protect consumers in the aftermath of the Great Depression and was ultimately repealed during the Clinton years allowing commercial banks, investment banks, securities firms, and insurance companies to consolidate.
“What we need is a system that puts an end to the boom and bust cycle, a system that recognizes we don’t grow this country from the financial sector, we grow this country from the middle class,’’ Warren said. “I am confident David can beat Goliath on ‘Too Big to Fail.’ We just have to pick up the slingshot again.’’