NEWS

    Trump Weighs Breaking Up Wall Street Banks, Raising Gas Tax

    Updated: May 2, 2017 at 5:15 pm EST  See Comments

    Bloomberg — President Donald Trump said he’s actively considering a breakup of giant Wall Street banks, giving a push to efforts to revive a Depression-era law separating consumer and investment banking.

    “I’m looking at that right now,” Trump said of breaking up banks in a 30-minute Oval Office interview with Bloomberg News. “There’s some people that want to go back to the old system, right? So we’re going to look at that.”

    Trump also said he’s open to increasing the U.S. gas tax to fund infrastructure development, in a further sign that policies unpopular with the Republican establishment are under consideration in the White House. He described higher gas taxes as acceptable to truckers — “I have one friend who’s a big trucker,” he said — as long as the proceeds are dedicated to improving U.S. highways.

    Separately, Trump said he’d be willing to meet under certain conditions with North Korean dictator Kim Jong Un, against the recommendations of his political advisers, to avert a military confrontation with the U.S. adversary. He also said that a Republican replacement for the Affordable Care Act would protect Americans with pre-existing conditions at least as well as Obamacare.

    Glass-Steagall

    During the presidential campaign, Trump called for a “21st century” version of the 1933 Glass-Steagall law that required the separation of consumer and investment banking. The 2016 Republican Party platform also backed restoring the legal barrier, which was repealed in 1999 under a financial deregulation signed by then-President Bill Clinton.

    A handful of lawmakers blame the repeal for contributing to the 2008 financial crisis, an argument that Wall Street flatly rejects. Trump couldn’t unilaterally restore the law; Congress would have to pass a new version.

    Trump officials, including Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn, have offered support for bringing back some version of Glass-Steagall, though they’ve offered scant details on an updated approach. Both Mnuchin and Cohn are former bankers who worked for Goldman Sachs Group Inc.

    Wall Street has repeatedly shrugged off politicians’ calls for bank breakups in recent years.


    The remainder of this article is available in its entirety at Bloomberg

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