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Wednesday, 10 April 2013 10:36

Bernie Sanders Writes Law to Break Them Up: 10 Largest Banks Bigger Now Than Before Taxpayer Bailout

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bernie32As Sen. Bernie Sanders (I-Vermont) charges in a news release issued from his Senate office:

The 10 largest banks in the United States are bigger now than before a taxpayer bailout following the 2008 financial crisis when the Federal Reserve propped up financial institutions with $16 trillion in near zero-interest loans and Congress approved a $700 billion rescue for banks that some considered “too big to fail.” Attorney General Eric H. Holder Jr. now says the Justice Department may not pursue criminal cases against big banks because filing charges could “have a negative impact on the national economy, perhaps even the world economy.”

“We have a situation now where Wall Street banks are not only too big to fail, they are too big to jail,” Sanders said. “That is unacceptable and that has got to change because America is based on a system of law and justice.”

As BuzzFlash at Truthout has written in numerous commentaries, the Obama Administration has given Wall Street execs a get out of jail free card.  It's part of the revolving door of regulators and prosecutors who go from the private sector to the public sector back to the private sector at an enhanced salary, defending the "too big to fail banks" that they should have been prosecuting.

Of the many columns on the injustice of letting Wall Street jailbirds off free, BuzzFlash posted: "Eric Holder Enables Dishonesty, Fraud and Likely Criminal Activity on Wall Street" ; and "Lanny Breuer Cashes in After Not Prosecuting Wall Street Execs, Will Receive Approximate Salary of 4 Million Dollars."

As a result of this Obama administration economic injustice and the threat that letting the same rip-off artists who caused the American economy to collapse continue to run even bigger banks and financial entities, Sanders and his staff penned a bill. It's a short piece of legislation that gets right to the point in Section 3:

Notwithstanding any other provision of law, beginning 1 year after the date of enactment of this Act, the Secretary of the Treasury shall break up entities include on the Too Big To Fail List, so that their failure would no longer cause a catastrophic effect on the United States or global economy without a taxpayer bailout.

Congressman Brad Sherman (D-California) introduced a companion version to the Sanders bill into the House on April 9:

The Sanders and Sherman legislation would give the Treasury Department 90 days to identify commercial banks, investment banks, hedge funds and insurance companies whose “failure would have a catastrophic effect on the stability of either the financial system or the United States economy without substantial government assistance.”

The list would have to include institutions deemed “systemically important banks” by the Financial Stability Board, the G-20 body that monitors and makes recommendations about the global financial system. The board in a press release last Nov. 4 identified eight U.S. banks required to maintain extra capital buffers: Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, State Street and Wells Fargo. Treasury would be required to break up those and any other institutions identified by the secretary as too big to fail.

The six largest U.S. financial institutions today have assets of nearly $9.6 trillion, a figure equal to about two-thirds of the nation’s gross domestic product. These six financial institutions issue more than two-thirds of all credit cards, over half of all mortgages, control 95 percent of all derivatives held in financial institutions and hold more than 40 percent of all bank deposits in the United States.

“In my view,” Sanders concluded, “no single financial institution should have holdings so extensive that its failure could send the world economy into crisis.  At the very least, no institution, no CEO in America should be above the law.  If an institution is too big to fail, it is too big to exist.”

If you want your dose of restoring economic accountability and justice to America, watch the Sanders/Sherman news conference on the law that would break up the too big to fail banks by clicking here.

To paraphase Clint "Empty Chair" Eastwood, it will make your day.

(Photo: 350vt)