Hank Kalet

Warren has introduced legislation to bring back Glass-Steagall, the Depression-era law that separate investment houses from regular banking operations that average Americans rely on for home and car loans, small business loans and other daily money-management functions.

A press release from Warren’s office called the legislation “a modern version of the Banking Act of 1933 (Glass-Steagall) that reduces risk for the American taxpayer in the financial system and decreases the likelihood of future financial crises.”

The legislation introduced today would separate traditional banks that have savings and checking accounts and are insured by the Federal Deposit Insurance Corporation from riskier financial institutions that offer services such as investment banking, insurance, swaps dealing, and hedge fund and private equity activities. This bill would clarify regulatory interpretations of banking law provisions that undermined the protections under the original Glass-Steagall and would make “Too Big to Fail” institutions smaller and safer, minimizing the likelihood of a government bailout.

The bill is co-sponsored by Sens. John McCain (R-AZ), Maria Cantwell (D-WA) and Angus King (I-ME). McCain, who was the Republican presidential candidate in 2008 when the banking system failed, said in the release that the Glass-Steagall repeal of 1999 created “a culture of dangerous greed and excessive risk-taking has taken root in the banking world.”

“Big Wall Street institutions should be free to engage in transactions with significant risk, but not with federally insured deposits. If enacted, the 21st Century Glass-Steagall Act would not end Too-Big-to-Fail. But, it would rebuild the wall between commercial and investment banking that was in place for over 60 years, restore confidence in the system, and reduce risk for the American taxpayer.”

Warren was blunter, saying that “the biggest banks continue to threaten the economy.”

“The four biggest banks are now 30% larger than they were just five years ago, and they have continued to engage in dangerous, high-risk practices that could once again put our economy at risk. The 21st Century Glass-Steagall Act will reestablish a wall between commercial and investment banking, make our financial system more stable and secure, and protect American families.”

McCain is right that more work will be needed — including the Brown-Vitter legislation that would set capital requirements for banks and limit government bail-out exposure — but bringing back Glass-Steagall is a good start.

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From the good folks at NJ News Commons:

Tent City, Three Ways (via NJ News Commons)

News outlets ranging from the AP to the Lakewood Scoop have covered the ongoing saga of Lakewood’s Tent City, an encampment of about 80 homeless people, which the town has been trying to shut down for years. This spring a deal was struck: Tent…

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Metta World Peace — i.e., the player formerly known as Ron Artest — could be coming home if the Lakers cut him. Peace is erratic. He’s combustible. And yet, he remains one of the true lock-down perimeter guys around. He’s physically strong, can hit the three and may be the one guy who fits alongside Carmelo Anthony at forward if the Knicks and Melo insist that the franchise player is better off at the four.

Signing Peace — which is far from a done deal, of course — would give the Knicks two elite perimeter defenders (along with Iman Shumpert), as well as two of the league’s most erratic and self-centered players (along with J.R. Smith).

It also should be mentioned that Peace should have been a Knick out of college — he went 16th in the 1999 NBA draft, one pick after New York landed Frederic Weis, perhaps the worst pick in the franchise’s long history of dumb draft moves.

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