It's called the 21st Century Glass-Steagall Act and it's aimed at breaking up the country's 29 systemically important institutions, typically referred to as being "too big to fail."
Industry opposition to the proposed return of Glass-Steagall has been predictably strong, with most big players claiming any curtailment of the size and scope of their businesses would put them at a competitive disadvantage to their global peers. Critics also claim it will eliminate much-needed diversity in their business models that helps financial institutions survive when times get tough.
In spite of the arguments, Barry Ritholtz, the CEO of Fusion IQ and author of Bailout Nation, isn't buying it.
"You can't stop fraud but you can make the penalties so severe that most people won't engage in it," Ritholtz says in the attached video, adding "that's what we have moved away from over the past few decades."
The original law created in 1933 prohibited traditional banks from owning brokerage firms. "The idea behind Glass-Steagall was to create a firebreak," Ritholtz says, "so Wall Street can go through its occasional spasms and it shouldn't affect what takes place on normal Main Street."Read More »from New Glass-Steagall Is Needed to Protect Main Street From Wall Street: Ritholtz