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Taking aim at Wall Street titans, two US senators unveiled legislation on Wednesday to restore a 1930s law that would force banks to choose between their commercial and investment activities.
The proposal from Democratic Senator Maria Cantwell and Republican Senator John McCain would restore the Banking Act of 1933, better known as the Glass-Steagall law, which was repealed with a 1999 law.
"For nearly 60 years, a firewall maintained the integrity of banking systems, preventing self-dealing and financial abuses, and limited the speculation of the stock market. Our bill would return that firewall," said Cantwell.
"Under our proposal, too-big-to-fail banks will be forced to return to the business of conventional banking, leaving tasks of risk-taking or management to others," said McCain.
The repeal of Glass-Steagall's curbs on bank activities -- a direct response to the Great Depression -- was directly tied to the rise a decade ago of Wall Street titans whose activities fed the global financial collapse of 2008.
McCain and Cantwell said their proposal would put an end to taxpayer-funded bailouts some investment giants can command because their collapse would have devastating economic aftershocks, a status commonly known as "too big to fail."
The legislation came one day after the Democratic Majority Leader in the House of Representatives, Steny Hoyer, said restoring Glass-Steagall was "certainly under discussion."
"As someone who voted to repeal Glass-Steagall, maybe that was a mistake," Hoyer told reporters.
