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Regulator Proposes Walling Off Investment Banks

FDIC chairman's suggestion follows President Trump's talk about reviving Glass-Steagall.

By Jesse Hamilton, Bloomberg | Updated on March 16, 2017

President Donald Trump has worried Wall Street by promising to bring back a Depression-era law that separated investment banking from consumer lending, but he hasn’t offered details on what his modern version might look like. Now a key regulator may be filling the void.

U.S. financial firms should partition their investment banking activity, putting it into a separate “intermediate holding company” with its own board, management and capital, Federal Deposit Insurance Corp. vice chairman Thomas Hoenig said Monday. The companies could even have a special class of stock, he said.

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