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For more than 60 years, The Glass-Steagall Act, enacted in the aftermath of the stock market crash of 1929, maintained the separation of commercial and investment banks.

In 1999, in the midst of nearly unprecedented job growth, Congress passed and President Clinton signed the Gramm-Leach-Bliley Act, which repealed Glass-Steagall as part of an attempt to “modernize” financial markets. On the first season of The Newsroom, the show compared the repeal of this historic reform to cheating on the perfect guy with an ex who dumped you. You can watch the clip above.

What happened after 1999?

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A decade later, as the financial markets froze up, the American government had to step in to support the largest banks from failing and completely decimating the American economy.

Today, the biggest banks are bigger than ever. As part of the Dodd-Frank financial reforms, regulators announced this week that the big banks need to double their capital requirements.

Senator Elizabeth Warren (D-MA) has been waiting for these new requirements and apparently thinks more needs to be done. She is joining with senators John McCain (R-AZ), Angus King (I-ME), and Maria Cantwell (D-WA) in introducing a new version of Glass-Steagall that restores the division between commercial and investment banks and takes other steps to reduce the risks of another global economic catastrophe:

This new bill from Senator Warren aims to play a part in reversing this trend so the banks will be smaller. After all, the three biggest banks (Chase, Bank of America, and Citi) are all bloated conglomerate banks that have enormous traditional and investment subsidiaries, so these banks wouldn’t be able to continue as they’re currently instituted. They would be broken up into much smaller firms.

What’s more, the 21st Century Glass-Steagall Act of 2013 will make it so banks cannot gamble with derivatives using depositors’ money like they do today. Currently, anyone who has money at banks like Chase, Bank of America, or Citi is implicitly using that money to help these banks make amplified bets that have the potential to cause another global meltdown. Reintroducing Glass-Steagall will make it so depositors’ money cannot be used for the derivatives market. This would be a major step toward restoring sanity to Wall Street.

To understand more what Warren’s proposed reforms are all about, watch this:

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