Bank stocks slip as White House confirms intent to revisit Glass-Steagall

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Financials don’t seem too happy to hear that bringing back Glass-Steagall is still on President Donald Trump’s policy to-do list.

In response to a question on Thursday about whether Mr Trump remains committed to a campaign promise to revisit the Great Depression era law — which prohibited commercial deposit-holding banks from engaging in riskier investment banking activities — White House press secretary Sean Spicer said that he was.

US bank shares trimmed their advance on the back of Mr Spicer’s answer. The S&P 500 banks index, which tracks the largest American lenders, cut its gain to 0.5 per cent from 0.8 per cent.

Financials have been boosted in the past by some of Mr Trump’s other policy proclamations, including an executive order authorising the review of Dodd-Frank financial regulations passed in response to the 2008 financial crisis.

But the prospect of reviving Glass-Steagall — which was repealed in 1999 by President Bill Clinton — does not seem to be on Wall Street’s wish list, although the proposal has appealed to populist voters in both parties attracted both by Mr Trump and former Democratic presidential contender Bernie Sanders.

Mr Trump’s Treasury secretary, Steven Mnuchin, has previously voiced support for a Glass-Stegall law for the 21st century.

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