[Photo: by Andrew Harrer / Bloomberg]

Until it was repealed in 1999, the Glass–Steagall Act provided for the separation of commercial and investment banking. It prevented securities firms and investment banks from taking deposits, while preventing commercial Federal Reserve member banks from:

• dealing in non-governmental securities for customers
• investing in non-investment grade securities for themselves
• underwriting or distributing non-governmental securities
• affiliating (or sharing employees) with companies involved in such activities

During the presidential campaigns, Donald Trump pledged to restore the Glass-Steagall Act, and last month WH spokesman Sean Spicer said that Trump remains committed to that pledge.

Yesterday, at a private meeting arranged by Senate Banking Committee Chairman Mike Crapo, Gary Cohn, who heads the National Economic Council, expressed support for a policy that would separate the consumer-lending businesses of large Wall Street banks from their investment banking. The remarks surprised some of the attendees, who would have thought that this former Wall Street executive would be more inclined to try and influence the Trump administration to take a pass on such radical legislation. 

Nevertheless, the remarks led a White House official to say later that Cohn was simply reiterating the Trump administration's view that the banking system should be simplified with a focus on helping business grow and create jobs. 

The Trump administration gets curiouser and curiouser.