‘Too Big to Exist’: Sanders Introduces Bill to Break Up Big Banks

by Nadia Prupis, staff writer | (Commondreams.org) | –

If passed, bill would give Treasury Secretary a year to break up institutions bailed out in financial crisis.

Sen. Bernie Sanders, who is running for president in 2016, will introduce a bill to Congress that would break up “too big to fail” institutions. (Photo: Brookings Institution/flickr/cc)

U.S. Senator Bernie Sanders of Vermont, who in April announced his candidacy for president for the 2016 election, on Wednesday will introduce a bill to break up the country’s biggest banks—just a day after the Senate passed a Republican budget that takes aim at many progressive issues.

Under the proposal, called the Too Big to Fail, Too Big to Exist Act, regulators on the Financial Stability Oversight Council would compile a list of institutions which say they are so large that their collapse could trigger an economic crisis—otherwise known as “too big to fail.”

The Treasury Secretary would then have a year from the bill’s passing to break them up.

“If an institution is too big to fail, it is too big to exist,” Sanders said Tuesday. “No single financial institution should have holdings so extensive that its failure could send the world economy into crisis.”

The firms on that list would also be banned from using customer money to make “risky or speculative activities on the financial market,” Reuters reports.

Rep. Brad Sherman (D-Calif.) is co-sponsoring the bill.

While the proposal is unlikely to pass, Sanders’ stance on the issue indicates his support of more progressive policies than his fellow Democratic presidential candidate, Hillary Clinton.

Clinton has been criticized for what some see as a friendly relationship with Wall Street, having taken millions of dollars in contributions from financial firms and other big corporations throughout her political career.

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Via Commondreams.org

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Related video added by Juan Cole:

Bernie Sanders: “Sanders Plan to Break Up Biggest Banks”

4 Responses

  1. How about being honest, truthful and face the real facts?

    The Federal Reserve is a private corporation, the cause of much of the economic crises and is definitely TOO BIG. It needs to be carefully closed down and replace by a legitimate US government operated fair banking system.

    The Fed has generated trillions of dollars for its corrupt owners since the Federal Reserve Act was slipped through Congress in 1913 during the Christmas Holidays.

    Face the facts.

  2. This is smoke and mirrors. The banks should have become the property of the US government when they were bailed out. If the bill were successful the banks would still be owned and run by the same smelly people.

  3. I think this act is very poor understanding of economics and regulation that will lead to more cronyism and not less. Any company that is failing “Needs” to fail and go out of business. The “too big to fail” idea was always faulty in the first place because no business is too big to fail. Their assets don’t just vanish into thin air; they get liquidated.

    Smaller banks would have grown if we had let those big ones fail back in 2008. If a tree is rotted out and ready to fall; you don’t artificially prop it up or say that trees aren’t allowed to grow old; you let it fall so new ones can grow.

  4. New trees growing in the same manure as old trees, subject to the same temptations and the same lack of oversight.
    If I understand the banking problem correctly the banks assets did actually vanish in to thin air because the so called assets were nothing more than pieces of paper saying that a house or a company was worth X amount of dollars when the house or company was really only worth 5% of X amount of dollars and the banks could no longer pretend otherwise. Therefore 95% of many so called assets just disappeared in to thin air. OK they did not really disappear because they were never there to start with but we live in a society that really likes to play make believe so badly that it ends up living a make believe reality. (to please the bosses)

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