WASHINGTON (Reuters) - Former Goldman Sachs Group Inc (GS.N) executive and White House adviser Gary Cohn shocked more than a few of his former Wall Street colleagues this week when he showed support for reinstating a Depression-era law that would break up the biggest U.S. banks. Here are some details about the law, called the Glass-Steagall Act, and why it has returned to the spotlight: WHAT IS GLASS-STEAGALL: Originally passed as part of the U.S. Banking Act of 1933, Glass-Steagall established a firewall between commercial and investment banking activity. The law was whittled away over time as banks gained permission to engage in more trading activity, and was repealed altogether in 1999 with the Gramm-Leach-Bliley Act. WHO SUPPORTS IT?: Since the 2008 financial crisis, Glass-Steagall has become a calling card for politicians eager to crack down on Wall Street. Democratic Senator Elizabeth Warren frequently invokes it, and Senator Bernie Sanders made it a major part of his presidential campaign. President Donald Trump also seized on the policy during his campaign. WHAT DOES THE WHITE HOUSE SAY?: The Trump administration has not backed away from his campaign stance, but there are questions about how aggressively the president will push for a new law. The issue only tends to come up when officials are asked about it. Treasury Secretary Steven Mnuchin said he supported a modern version of Glass-Steagall in response to a question during his confirmation hearing. White House Press Secretary Sean Spicer said the White House supports the proposal when asked by reporters. Cohn responded favorably when asked by Warren at a private meeting with senators. WHAT WOULD A NEW GLASS-STEAGALL LOOK LIKE?: There are number of ideas to create what some refer to as a “21st Century Glass-Steagall.” Warren has proposed splitting commercial and investment banking, and also barring depository institutions from using modern financial instruments like derivatives. Thomas Hoenig, the vice chair of the Federal Deposit Insurance Corporation, has proposed a similar split, and would subject banks to a higher, 10 percent capital requirement. Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, would force big banks to take on so much capital they would prefer to split into smaller institutions. COULD IT HAPPEN?: Although many Wall Street critics have seized on Glass-Steagall, efforts to change the law have garnered very little support. Warren’s proposal received just a handful of legislative co-sponsors. And because Congress and the White House are still consumed with complex fights over health care and tax reform, there seems to be little appetite for a broad, controversial overhaul of the financial system. ARE THERE RISKS FOR BANKS?: Big U.S. lenders including JPMorgan Chase & Co (JPM.N), Bank of America Corp (BAC.N) and Citigroup (C.N) would be most impacted, because their commercial lending and investment banking operations are closely intertwined, say analysts. Goldman Sachs Group Inc (GS.N) and Morgan Stanley (MS.N) might be less impacted, although they would likely have to revert to being standalone investment banks and shed their deposit funding. But even if Glass-Steagall does not become law, the industry may have to spend money, time and energy lobbying against the idea, when they would rather focus on rolling back existing rules. 
Factbox: Trump adviser from Wall Street backs U.S. bank breakups