Sanders backs reviving Glass-Steagall

Democratic presidential candidate Sen. Bernie Sanders (I-Vt.) said Friday he supports a bill championed by Sen. Elizabeth Warren (D-Mass.) designed to break up big banks.

Earlier this month, Warren offered legislation to re-instate Glass-Steagall, a Depression-era banking law that divided commercial and investment banking.

“Today, not only must we reinstate this important law, but if we are truly serious about ending too big to fail, we have got to break up the largest financial institutions in this country,” Sanders said in a public statement.

{mosads}President Bill Clinton repealed the law in 1999. Glass-Steagall has long been popular with liberals, who argue the repeal was part of the deregulation they say led to the 2008 financial collapse.

The issue sets up a divide between Hillary Clinton, the Democratic frontrunner, and Sanders, who has been gaining on her in the polls and riding a wave of popularity among the party’s liberal base.

Earlier this week, one of her economic advisers said that Clinton wouldn’t be pushing to reinstate Glass-Steagall law.

Sanders was one of eight senators in 1999 who voted against its repeal.

Many economists and President Clinton’s former advisers though argue that the repeal did not contribute to the crisis.

At a 2014 economic forum in Washington, former President Bill Clinton said that “getting rid of Glass-Steagall didn’t have anything to do with the crash.”

The White House also sought to distance itself from Warren’s Glass-Steagall push on Friday.

“At this point, we believe that the kind of implementation of Wall Street reform is the most effective way to protect our economy and middle-class taxpayers,” White House press secretary Josh Earnest told reporters when asked whether President Obama supports it.

For her part, Hillary Clinton has yet to address Glass-Steagall in her campaign. But she defended her husband’s decision to repeal it during a September 2008 interview with CNN.

“There were reasons. There were positive reasons,” Clinton said then of its repeal.

“What I believe the failure in ’99 was — is that once you removed some of those barriers between banks and investment banks and the kind of business that could be done by banks — that there needed to be new regulatory framework,” she continued. “But there was no appetite in the Republican Congress or with a Republican president to take the second step.”