Bill Clinton defends repeal of Glass-Steagall

Former President Bill Clinton has defended his decision to repeal Glass-Steagall, the Depression-era banking regulation that splits large financial institutions and is championed by liberals.

“Politicians — particularly now, in the aftermath of this crash — fear that anything they do will be held against them later if anything bad happens,” Clinton told Inc. in an interview. “Look at all the grief I got for signing the bill that ended Glass-Steagall. There’s not a single, solitary example that it had anything to do with the financial crash.”

{mosads}Democratic presidential candidates Sen. Bernie Sanders (I-Vt.) and former Maryland Gov. Martin O’Malley have backed reinstating the policy, which would require big banks to divide their commercial and investment practices.

Democratic presidential front-runner Hillary Clinton declined to take a position on the policy while campaigning in South Carolina last month.

“I think this is a much more complicated issue than to just point at any one piece of legislation and say, if we just pass that, everything would be fine,” she said when asked about Glass-Steagall. “It’s a more complicated assessment that just any one piece of legislation might suggest.”

Most economists at the Federal Reserve agree that former President Clinton’s repeal of the policy in 1999 didn’t contribute to the crash.

Still, Glass-Steagall has become a political wedge issue for Democrats in recent months, especially since Sens. Elizabeth Warren (D-Mass.) and John McCain (R-Ariz.) reintroduced it in the upper chamber.

Bill Clinton told Inc. that he could support tweaking the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act — particularly on its impacts for community banks, which have lobbied for years that the regulations that are applied to big banks should not be applied to them.

“There should be a serious look at the impact of Dodd-Frank on legitimate community banks,” Clinton said. “I think we ought to look at the way the Canadians regulated their banks. The Canadians had no financial crisis, you know. They always had unified banking — investment and commercial banking under one roof. But they had different rules for them.”

Former President Clinton also called for the Small Business Administration to “become more aggressive” in its financing.