US Senator Elizabeth Wants Obama Administration to Break Up Our Biggest Banks
At a recent event hosted by the Americans for Financial Reform (AFR) and the Roosevelt Institute, US Senator Elizabeth Warren (D-Mass) called on the Obama Administration to break up Wall Street’s biggest banks. She also chastised regulators for not dealing with financial institutions that cannot fail because they are just “too big.” This means that because they are so integral to the economy, if the banks are ever in financial trouble, the US government would inevitably have to step in like it did during the 2008 economic crisis so that the entire financial system doesn’t fall apart.
During her speech, Warren spoke about the Dodd-Frank Wall Street Reform and Consumer Protection Act, observing that three years after its enactment it the hasn’t solved this “too big to fail” dilemma. She pointed out that clearly not much has changed between then and now, observing that the four biggest banks (Citigroup (C), JPMorgan Chase (JPM), Wells Fargo (WFC), and Bank of America (BAC) are 30% bigger than they were five years ago. She also noted that the five largest institutions hold over half of the bank assets in the US.
Warren wants to know when the government was going to start ensuring that large Wall Street institutions can’t take the economy down again while leaving taxpayers to foot the bill. She believes her 21st Century Glass Steagall Act could solve this “too big to fail” problem, while making turning these dismantled, smaller banks into institutions that are no longer too big to run, regulate, pursue, or prosecute.
Earlier this year, Warren partnered up with Senators Maria Cantwell (D-WA) and John McCain (R-AZ) to introduce the Glass Steagall Act. The bill seeks to break up large banks by separating retail banking from higher risk banking activities.
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Elizabeth Warren Slams Regulators for Keeping Banks “Too Big to Fail”, Mother Jones, November 12, 2013
Elizabeth Warren Hits Big Banks Where It Hurts, New Bill Would Restore Glass-Steagall, Forbes, July 11, 2013
Glass Steagall Act (PDF)
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