Sherrod Brown's Bill To Tame ‘Too Big To Fail’ Banks Coming This Week
The unlikely pair of progressive Sherrod Brown (D-OH) and conservative David Vitter (R-LA) are set to take their campaign against “too big to fail” banks to the next level. This week they will introduce a new bill that will go much further than the Dodd-Frank financial reform in shrinking the risks presented by the big banks, which are bigger now than before the financial crisis of 2008. A draft of the bill leaked last week. The legislation will reportedly require all banks to keep capital equal to 10 percent of their assets at all times. Those with assets of more than $400 billion would be obligated to hold up to 15 percent.
Who’s against such taking such modest-sounding precautions to prevent another global financial crisis that would require another bailout or the total collapse of the global economy? The big banks, of course.
You’ll note the bill doesn’t actually break up the big banks or reinstate Glass-Steagall — the New Deal-era law that separated commercial and investment lending that was repealed in 1999. It simply sets capital requirements, something Treasury Secretary Timothy Geithner opposed during the drafting of Dodd-Frank.
Still, the banks are saying the bill is radical and would hurt an economy that’s still trying to recover from the last financial crisis. They claim capital requirements are already too high.
http://www.nationalmemo.com/bipartisan-bill-to-tame-too-big-to-fail-banks-coming-this-week/
If Brown is behind it, it must be good. But if Vitters supports it ... We will see. It sounds like a modest improvement but a step in the right direction.
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