John McCain, reconnecting with his inner maverick, has teamed up with liberal firebrand Maria Cantwell on a bill to break up Wall Street banks by reinstating the Glass-Steagall Act. The Depression-era law, dumped a decade ago, enforced a split between commercial banking and investment banking. The effort to bring it back, which will earn McCain and Cantwell the ire of both Wall Street and the Obama administration, has little chance of success, but is aimed at sending a message that not enough’s being done to change Wall Street.
That puts McCain and Cantwell in a growing camp, which notably includes Obama adviser Paul Volcker, that wants to ban commercial banks from trading in derivatives and other risky markets. But the Obama administration favors more minor reforms for Wall Street, like requiring banks to disclose more risky trades, and hold bigger capital reserves. “I think going back to Glass-Steagall would be like going back to the Walkman,” one Treasury official tells Newsweek.