U.S. Treasury secretary opposes breaking up big banks

U.S. Treasury Secretary Steven Mnuchin said on Thursday that he does not support breaking up the nation's biggest banks.

"We do not support a separation of banks from investment banks, we think that would have a very significant problem on the financial markets, on the economy, on liquidity," Mnuchin said at a hearing before the Senate Banking Committee.

While the Trump administration has expressed support for a modernized version of the 1933 Glass-Steagall Act, breaking up the nation's biggest banks would be a "huge mistake," he said.

The original Glass-Steagall Act was put in place to divide commercial banks and investment banks before it was repealed in 1999 due to financial deregulation. Many people have blamed the repeal of Glass-Steagall Act for contributing to the financial crisis in 2008.

During the campaign, U.S. President Donald Trump had called for a "21st century" version of the Glass-Steagall Act, but didn't offer any policy details.

White House press secretary Sean Spicer said earlier this month that the Trump administration would not release any proposals about the modernized Glass-Steagall Act soon.

"We're not at a point where we're ready to roll out details of that yet," Spicer said.

"There are aspects of Glass-Steagall that you support but not breaking up the banks and separating commercial banking from investment banking? What do you think Glass-Steagall was if that's not right at the heart of it?" Senator Elizabeth Warren said Thursday at the hearing, expressing confusion and doubt over the administration's stance on the issue. Enditem