Sanders to introduce bill to break up mega-banks
Staff Report | March 27,2013
BURLINGTON – U.S. Sen. Bernard Sanders said Wednesday he will introduce legislation to break up the nation’s mega-banks.
Sanders said the banks have grown so big that the Justice Department has refused to pursue prosecutions for fear an indictment would harm the financial system.
According to Sanders’ office, the 10 largest banks in the country are bigger now than before a taxpayer bailout following the 2008 financial meltdown.
Over Sanders’ objection, Congress approved a $700 billion rescue because of concerns that the financial institutions were too big to fail. Another $16 trillion from the Federal Reserve propped up financial institutions.
Sanders said that Attorney General Eric Holder Jr. now says the Justice Department may not pursue criminal cases against the big banks because filing charges could “have a negative impact on the national economy, perhaps even the world economy.”
“In other words,” Sanders said, “we have a situation now where Wall Street banks are not only too big to fail, they are too big to jail. That is unacceptable and that has got to change because America is based on a system of law and justice.”
He said the banks have become so big that the six largest institutions - J.P. Morgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley - have assets today of nearly $9.6 trillion, a figure equal to about two-thirds of the nation’s gross domestic product.
In addition, Sanders said the 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.
Sanders’ legislation would give Treasury Secretary Jacob Lew 90 days to compile a list of commercial banks, investment banks, hedge funds and insurance companies that he deems too big to fail.
Within a year after the legislation became law, the Treasury Department would be required to break up those banks, insurance companies and other financial institutions identified by the secretary.
“If an institution is too big to fail, it is too big to exist,” Sanders said.