Sen. Elizabeth Warren doesn’t think Wall Street should be using your savings account in risky investments.
The Massachusetts Democrat is part of a bipartisan team of senators who introduced new legislation late on Thursday to regulate Wall Street.
“Banking should be boring,” Warren said on Friday’s Morning Joe. It’s why she, Arizona Republican Sen. John McCain, Washington Democrat Sen. Maria Cantwell, and Maine Independent Angus King introduced a modernized Glass-Steagall bill, a new version of the 1933 regulation bill. At its core, the bill stops the “too big to fail” banks from using federally-insured money in high-risk investments.
“In 1933, after the Great Depression, we separated what’s called commercial banking–that’s your checking account, the savings account, the part that has FDIC insurance—from the risk-taking activities, you know the gambling that takes place on Wall Street,” Warren explained. “It took away the boom and bust cycle of the financial industry.”
Wall Street lobbying pushed legislators to get rid of that separation over time; the bill was gutted in 1999.
If her bill passed, nothing would look different for the average consumer, Warren said. But big banks are already putting up a fight.
“The only difference is when they take those risks, they don’t get access to your savings account,” she noted.
Warren was quick to note that both sides of the banking industry are important parts to the financial system, but stressed that the two sides shouldn’t be connected.
“If you wanna take risks, do it on Wall Street,” Warren said. “But don’t do it with deposit money that’s federally insured.”
Though Washington gridlock could stop the bipartisan bill, the senator said she is optimistic about her work in Washington.
“My alternative is to throw a shoe at the television set,” she said. “At least when I come here I can work on legislation, I can work on trying to make a difference.”