|Gary Cohn has a plan to takeout Goldman Sachs' competition.|
White House economic adviser Gary Cohn, a former Goldman Sachs CEO, says he supports a potential breakup of the country's big banks.
His comments were made to several members of the Senate Banking Committee at a meeting on Wednesday reports The Washington Post.
Sen. Elizabeth Warren (D -Mass.), a financial interventionist of the first order, asked Cohn whether the Trump administration planned to follow through with a campaign promise to separate traditional commercial banking from Wall Street investment banking.
Cohn said he was open to those discussions, which would largely revolve around a revival of the Glass-Steagall Act, a Depression-era law that restricted the kinds of activities banks could engage in.
The Post notes that the Republican 2016 platform called for bringing back Glass-Steagall, but the banking industry has largely played down the possibility.
Cohn's statements, the Bezos rag reports, rattled some industry insiders, who said it appeared to show the White House may be more serious about the idea than they initially thought.
It should be noted that according to multiple reports Cohn's influence with the President is increasing.
I'm sure it's all coincidence but bringing back Glass-Steagall would help Cohn's old crony firm, Goldman Sachs.
The Post correctly notes that Goldman Sachs has traditionally thrived in the investment banking world but the elimination of Glass-Steagall introduced new competition from financial institutions such as Citigroup and JPMorgan Chase. Bringing back a version of Glass-Steagall could force some of Goldman Sachs' competitors out of the lucrative investment banking world.
"It is a brilliant strategy if what Gary Cohn wants is to kill Goldman Sachs' toughest competition," said Dennis Kelleher, president of Better Markets, a nonprofit advocacy group, according to The Post.