President Trump considers Breaking Large Banks

In an interview with Bloomberg President Donald Trump revealed he is considering breaking up the nation's biggest banks, which is a promise he has made during the presidential campaign. In response to a question regarding breaking the banks and reinstating the Glass-Steagall law, which separated commercial and investment banks but was repealed in 1999, President Trump  said he is "looking at that right now."

"The theory has always been the sum of the parts is worth considerably more than the whole… You might find a lot of investors who say that (if) they're going to break up these banks, they're more [valuable] in pieces than they are together, I'm going to buy them." said analyst Dick Bove, vice president for equity research at Rafferty Capital Markets for a CNBC report. 

The repeal of Glass-Steagall is sometimes blamed for the financial crisis of 2008. While the absence of the law may have played a role in the crisis, the problems in the financial system that caused the financial meltdown reached far beyond the issues Glass-Steagall was meant to prevent. For example, many of the financial institutions that were to blame for the unethical practices were investment banks and insurers, not large banks. 

After the president’s remarks however, bank stocks remained mostly stable. At least for now, the banking and financial industry is not taking the president’s remarks very seriously. 

"I just think he had a need to communicate, to connect again with community banks and say, 'Hey guys, we're on your side. We believe in you and maybe we should break up the big Wall Street banks,'" Bove added. "But I don't expect anything to come of it."

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