Glass-Steagall Redux Would Be a 'Boon': Bove
Introducing legislation separating investment banks from commercial banks would be a "boon" for shareholders, despite banks' opposition, Richard Bove, banking analyst at Rochdale Securities, told CNBC Thursday.
Under the Glass-Steagall Act approved in 1933 after the Great Depression, investment banks and commercial banks were separated to reduce the threat of speculation. But the Act was repealed in 1999.
Companies themselves should have "enough sense" to get rid of non-growth businesses and it would be "positive" for them if the government comes in and does it for them, Bove said.
"There are no great opportunities for growth in consumer finance," he told "Squawk Box."
The credit card business is saturated, filled with price competition, the mortgage business is "going nowhere" and, when General Motors makes a comeback, it will take some business in financing for the auto sector from banks, Bove explained.
By contrast, investment banking is a growth area because, with money supply expanding, economic growth is likely to continue, there will be a big increase in mergers and acquisitions and the fixed-income market will also be very positive, he said.
"Would you rather own Merrill Lynch or would you rather own Bank of America? I would rather own Merrill Lynch," Bove added.