New Jersey Senate Bill SR90

New Jersey 2024-2025 Regular Session

• Introduced: 4/8/24
• Refer: 4/8/24

Caption

Urges President and Congress to enact legislation reinstating the separation between commercial and investment banking.

Impact

The resolution states that the separations enacted by the Glass-Steagall Act served to curb such speculative activities and that its repeal has resulted in repeated financial crises. By reinstating these legal distinctions, as proposed in the Return to Prudent Banking Act of 2023, SR90 aims to strengthen the financial system and prevent the irresponsible behaviors of conglomerates that jeopardize economic stability. The bill implies that doing so could restore public trust in the financial system and protect jobs and taxpayer investments.

Summary

Senate Resolution No. 90 urges the President and Congress of the United States to reinstate the separation between commercial banking and investment banking, which was established under the Glass-Steagall Act of 1933. The legislation was passed to prevent the type of speculative financial practices that contributed to the economic collapse during the Great Depression. Proponents of SR90 highlight that the repeal of this act in 1999 led to the merging of commercial banks with investment firms, creating conglomerates that engaged in risky financial practices, which in turn resulted in significant economic destabilization and contributed to the 2008 financial crisis.

Contention

Supporters of SR90 believe that the reinstatement of the separation between commercial and investment banking is crucial for safeguarding against future economic recessions. However, the discussions also reveal a level of contention, as some may view this resolution as an overreach of state influence over federal banking policies. The varying responses from different stakeholders—including financial institutions and lawmakers—will likely determine the future of similar measures in state and federal legislative agendas.