Bernie Sanders’s claim that Glass-Steagall banned commercial bank loans to ‘shadow banks’

[George II]

Bernie Sanders’s claim that Glass-Steagall banned commercial bank loans to ‘shadow banks’

“Secretary Clinton says that Glass-Steagall would not have prevented the financial crisis because shadow banks like AIG and Lehman Brothers, not big commercial banks, were the real culprits. Secretary Clinton is wrong. Shadow banks did gamble recklessly, but where did that money come from? It came from the federally insured bank deposits of big commercial banks — something that would have been banned under the Glass-Steagall Act.”

A key dispute between former secretary of state Hillary Clinton and Sen. Bernie Sanders in the race for the Democratic nomination is the role that the partial repeal of Glass-Steagall played in the 2008 financial crisis. Clinton’s husband, of course, in 1999 signed the law that helped break down the walls between investment banking firms and commercial banks.

Our goal here is not to re-litigate the 1999 legislation’s role in the Great Recession. Each side can muster experts to make their case, though in general we would note that few economic crises (like plane crashes) are the result of one single factor; there is a risk in overemphasizing one reason above others. Even Sen. Elizabeth Warren (D-Mass.), who favors reinstalling a version of Glass-Steagall, has acknowledged that crisis probably could not have been avoided if Glass-Steagall had been in place. (The Sanders campaign likes to cite this analysis blaming Glass-Steagall by the regulatory reform group Better Markets.)

So let’s look at Sanders’ specific claim here: That the “shadow banks” got their funds from the “federally insured bank deposits of big commercial banks — something that would have been banned under the Glass-Steagall Act.” Is that correct?

(this is long...more at the link below)

Bottom line?

Three Pinocchios



https://www.washingtonpost.com/news/fact-checker/wp/2016/01/11/bernie-sanderss-claim-that-glass-steagall-banned-commercial-bank-loans-to-shadow-banks/

[Thinkingabout]

1. We have Dodd Frank enacted, a bill in which Sanders voted yea on,

I would think Sanders or his staff would have read the bill before the final vote. The only thing I can think is there is a need of some to revive the twentieth century, if the Dodd Frank bill does not include the wording Sanders thinks is important in Glass Stegall, why doesn't he sponsor a bill which amends the Dodd Frank bill to include the needed wording? Even Elizabeth Warren says the Glass Stegall would not have prevented the financial crisis of 2008 especially after the passage of the CFMA of which Sanders voted yea.

[msrizzo]

2. Most revealing

Interesting

[NCTraveler]

3. "Bernie Sanders’s claim that Glass-Steagall banned commercial bank loans to ‘shadow banks’"

And Sanders is wrong. Isn't this his main issue?

His need to go scorched earth after his campaign was caught stealing Clinton info isn't looking too good for him.

[Human101948]

11. Guess what? Everyone except some Hillary dead enders have forgotten that supposed "crime"

Try again.

[NCTraveler]

12. Happy Monday!!!!!

[MeNMyVolt]

14. Guess I'm a dead-ender then.

No way I'm over it.

[Human101948]

15. Don't let it get to you...there's a long way to go...

Seriously, I don't think it will be of much consequence in determining the outcome this season.

[Truprogressive85]

4. Four Pinocchios

Hillary Clinton’s claim that she’s the only candidate in either party who would not raise middle-class taxes (and promises to raise incomes)



https://www.washingtonpost.com/news/fact-checker/wp/2016/01/07/hillary-clintons-claim-that-shes-the-only-candidate-in-either-party-who-would-not-raise-middle-class-taxes-and-promises-to-raise-incomes/

[msrizzo]

8. Rhetorical hooey over downright misinformation....

I'll take it!

[MeNMyVolt]

10. Oh, deflection. How original. n/t

[Truprogressive85]

13. oh

lol if you say so

[mmonk]

5. Sorry but commercial banks loading up

on CDOs on their proprietary accounts would have been prohibited.

[KittyWampus]

6. On the persistent bullshit that CLINTON repealed Glass-Steagall>>>

It was a Republican Congress that introduced that bill and it passed both houses with margins so huge a veto would have done nothing to slow it down.

Clinton could have vetoed it as a symbolic measure, I suppose. But it was going to pass effortlessly with or without him.

[BooScout]

7. I've explained that here countless times....

I've also explained how Bill Clinton managed to get a compromise in that bill regarding the practice of red-lining....but not many have listened, paid attention or understood. They have a talking point and are sticking to it.

[MeNMyVolt]

9. K&R. Hope people take the time to read this.

[riversedge]

16. Three Pinocchios --tsk tsk

[SunSeeker]

17. He does not appear to really understand the modern financial industry. nt

[Cha]

18. KICK!