Trump's top economic advisor and former Goldman Sachs executive told senators he's in favor of a rule that would radically transform Wall Street

Gary Cohn, the top economic advisor to President Donald Trump and former Goldman Sachs chief operating officer, told lawmakers that he backs a rule that would separate commercial and investment banks according to a report from Bloomberg.

Bloomberg's Elizabeth Dexheimer reported that Cohn told a private meeting of the Senate Banking Committee that he supports separating the riskier investment banking side of Wall Street from the consumer-facing lending business.

The answer was prompted by a question from Wall Street critic Sen. Elizabeth Warren, Bloomberg said, citing sources in the room.

Such a move would cause a major realignment on Wall Street. The Glass-Steagall Act, a 1933 law mandating the separation of the investment and commercial banks, was repealed in 1999, leading to a slew of bank mergers. These combined businesses have been blamed by lawmakers and analysts as a contributor to the financial crisis.

The comments seem to fall in line with the thinking of many within Trump's administration. The Republican platform for the 2016 election called for a re-institution of Glass-Steagall and during his confirmation hearing, Treasury Secretary Steven Mnuchin told the Senate Finance Committee he backs a "21st century version" of the law.

Neither of these statements, however, come from someone who was the second-in-command at an investment bank like Goldman as Cohn was. According to Bloomberg, many of the lawmakers were surprised at Cohn's comments.

It also runs against initial signals from the Trump administration regarding deregulation of financial institutions. Trump signed an executive order shortly after taking office in February, instructing the Treasury department to look into ways to repeal or roll bank the major Dodd-Frank regulations for banks that grew out of the financial crisis.

Cohn did not provide details of any official plan from the White House, according to the report, and it is unclear when the White House would take up the push for reform.

Read the full report at Bloomberg»