Glass-Steagall Resolution Introduced in the Italian Senate

June 18, 2010 (LPAC)—Italian Senator Oskar Peterlini introduced a resolution in the Italian Senate on Thursday, calling on the Italian government to adopt a Glass-Steagall type of separation of commercial banking and investment banking, and in particular to work to establish international agreements based on this principle.

The resolution stresses the fact that speculative financial activity has dried up all of the capital for the productive economy, and that in the past two years, governments have simply bailed out those who have caused the problem. The Cantwell-McCain resolution in the U.S. Senate is also cited.

The resolution concludes by calling on the Italian government:

"to revise Italy's banking laws, in particular as regards the separation between commercial banks and investment banks, for the purpose of guaranteeing that the issue and trading of financial securities, and especially all of those speculative instruments under the name of derivatives (futures, options, swaps, etc.) be completely separate from the ordinary activities (deposits and loans) of commercial banks, de facto restoring the firewall that until the nineteen nineties protected ordinary financial activities from speculative operations;

"to act in all international venues to promote multilateral agreements which establish a return to such a separation of commercial banks and investment banks, thus favoring a climate for long-term investment in the real economy."

The names and affiliations of the other initial signatories are not yet available, nor is it clear when the resolution will be scheduled for debate in the Senate.

In October 2008, Peterlini, a Senator from the autonomous region of Trentino-Alto Adige, introduced a resolution calling for a New Bretton Woods-style reorganization of the international financial system as proposed by Lyndon LaRouche. That led to a three-hour debate in the Senate in February 2009, in which an amended version of Peterlini's resolution was approved, after every political party took a stand on the issue, leading to a broad coalition of forces adding their voices to the call for a bankruptcy reorganization of the global economy.