President Donald Trump said Monday he was contemplating breaking up the big Wall Street banks.
“I’m looking into that right now,” he told Bloomberg about bringing back the “old system” that separated consumer lending and investment banking.
The move would revive a version of the repealed Glass-Steagall Act thatwas passed in 1933, which required banks to separate commercial deposit banking from investment banking.
While campaigning , Trump said he supported a 21st century version of the law. The adoption of the idea into the Republican platform came after the financial crisis of 2007 to 2009 sparked renewed calls for the act, mostly from Democrats.
O ther vocal supporters of Glass-Steagall’s reintroduction — a drawn-out and expensive process that could impact banks’ earnings potential — included Democratic Sen. Elizabeth Warren and Sen. Bernie Sanders.
The act was repealed in 1999, enabling the rise of mega banks like Citigroup and JP Morgan that cater to both small checking accounts and million-dollar investment portfolios.
Stocks dipped after headlines from Trump’s interview crossed. At 1:17 pm ET, the Dow was down 9 points, or 0.04%, at 20,931.37.
The financials sector of the S&P 500 also took a hit, as did shares of several big banks including Morgan Stanley, Citi, and Goldman Sachs.