What is Glass-Steagall?

The US Banking Act of 1933 is often known as the "Glass-Steagall" Act, after Senator Carter Glass and Representative Henry B. Steagall, the co-sponsors of the Bill.

Glass-Steagall sought to separate commercial and investment banking which, its proponents claimed, would help prevent instability in the banking sector, particularly the 1929 "crash", where banks used customer deposits to invest in high risk securities.

From the 1960's, banks began to find loopholes in the Act, effectively negating the Act until it was finally repealed in 1999.  Proponents of Glass-Steagall claim that this directly resulted in the banking crash of 2007-8, felt around the World.

This is from www.larouchepac.com:

How It Works

Since 1999, banks have been allowed to use commercial deposits and assets as fuel for securities trading on the derivatives market.
Because commercial and speculative assets are so heavily comingled, the government is forced to protect the assets of banks making risky bets through near perpetual bailouts and purchasing of toxic debt.

It was the derivatives bubble that blew up the system and bankrupted the US banks in the 2007-2008 crash.

1. Commercial Banking institutions have one year to divest themselves of all non-commercial banking units, with no cross management or ownership between commercial and non-commercial units.
2. Commercial Banks are barred from using more than 2% of its capital for the creation, sale, or distribution of securities (certain bank-qualified securities are exempted)
3. Prevents Commercial Banks from loaning their commercial deposits into such vehicals as would support the creation and circulation of securities.
4. No securities of low or potentially low value can be placed by a bank into its insured commercial bank units.
* Adds provision stating Glass-Steagall is the preeminant regulator of the banks, limiting banks from putting its depositors and shareholders at risk.

Glass-Steagall forces separation of commercial from investment banks, it ends Too Big To Fail, bars government bailouts, and will stop the onset of hyperinflation.

There is now a move to bring back Glass-Steagall,    

Notice how the closing argument of the interviewer is to the effect that as there's little chance (in their opinion) of getting the bill through, there is therefore no point in pursuing it.

Is there any chance that banks, who stand to lose from the re-introduction of Glass-Steagall, have any influence over news and media outlets?

 

The Mass Media and Politics: an Analysis of Influence