The party approved a platform Monday that calls for breaking up big banks by reinstating the Glass-Steagall Act, according to a Bloomberg report. The law, passed during the Great Depression, kept banks’ commercial lending separate from activities like securities trading. When the law was repealed in 1999, almost every Republican in Congress supported the decision, according to Bloomberg.
Bernie Sanders, whose upstart candidacy gave Clinton a run for her money this spring, has called for breaking up big banks. So has Donald Trump, the presumptive GOP nominee. And Clinton’s cozy relationship with Wall Street banks is something Republicans think they may be able to use against her.
“This is one of the prongs that Trump will continue to use, the message that Clinton doesn’t want to break up the big banks, but she is being sent to DC to protect them,” Isaac Boltansky of Compass Point Research and Trading told Bloomberg.
But many feel the Republicans are making a mistake by throwing their platform behind a renewed Glass-Steagall.
“This has the potential to do damage to a really critical industry,” Tony Fratto of Hamilton Place Strategies told Bloomberg. “The Republicans are making a mistake by choosing this populist route, and it isn’t going to pay off. This is embarrassing.”
Perhaps even more embarrassing -- Republicans are finding themselves on the same side as their mortal enemy: Elizabeth Warren. Warren, who many consider to be on the shortlist for Clinton’s VP pick, has been one of Congress’s most aggressive advocates for the return of Glass-Steagall. She’s sponsored legislation to reinstate the law, according to Bloomberg -- but it hasn’t advanced in the Republican-controlled Congress.
While some are inclined to see the Republican platform’s support of renewing the law as a stunt -- a populist ploy that will never go anywhere in practice -- others warn not to get too complacent.
“It is a mistake to simply dismiss the news as a cynical political ploy,” Brian Gardner, and analyst at Keefe Bruyette & Woods, told Bloomberg. “The risk that Congress will reinstate Glass-Steagall is higher than many investors appreciate.”
The Republican Party is making a U-turn on previous policy to try to hit Hillary Clinton in a vulnerable spot -- her Wall Street ties. How? By reinstating a law almost every Republican used to be against.