Sherrod Brown: Let's break up the Big Banks

[laughingliberal]

Let's keep banks from growing too big to regulate
By Sherrod Brown
Friday, April 30, 2010; A19


Wall Street executives and newspaper editorial boards argue that it's not size but the systemic risk and the interconnectedness of "too big to fail" banks that matter <"Bailing out of bailouts," editorial, April 25>.

They are wrong. Too big to fail is simply too big. It's not a choice between competing options. The foundation of the argument that we can always understand and recognize risk is about as sturdy as the mezzanine tranche of a subprime securitization.

Three years ago -- before some of our nation's biggest financial institutions put our economy on the brink of collapse -- this argument would have carried more weight. But after millions of jobs and homes have been lost and trillions of dollars in savings have been destroyed, we must recognize that regulatory hubris is a dangerous thing.

Two years ago -- after failing to detect or address growing risk in the financial sector -- the Bush administration stepped in to save those institutions deemed "too big to fail." By intervening to save some banks but not others, the federal government essentially set a size threshold. While all of the institutions that foundered in 2008 were tightly woven into the fabric of our economy, some were big enough to shatter our economy. Those institutions received bailouts and the smaller institutions were allowed to fold, taking countless small businesses and jobs with them.

The Wall Street reform bill that is before the Senate, now that Republicans have ended their filibuster, will make important changes to our laws to provide for the orderly liquidation of these trillion-dollar banks if necessary. Those changes are important but not sufficient. <snip>

http://www.washingtonpost.com/wp-dyn/content/article/2010/04/29/AR2010042902358_pf.html

Too big to fail is too big to live. Break 'em up!

[denverbill]

1. When even Paul Volcker supports it, it's not a radical concept. It's common sense.

I hope they do this, but I'm not optimistic.

[laughingliberal]

2. I'm not optimistic either. Too many sell outs in the party, today

But I appreciate ones like Brown who are trying to bring it up.

[liberal N proud]

3. Sherrod is not one of them

He is still one of peoples Senators.

[art of compromise]

4. Agreed.

[Enthusiast]

6. Common sense defeated

by huge money.

[Odin2005]

5. Too big to fail means to big to be allowed to exist.

[Union Yes]

7. Thank you Sen Brown for having the guts to call for this. knr nt

[Dr Morbius]

8. Half a dozen banks control some 60% of the nation's economy.

I suspect that even the bank of the United States that Jackson broke up didn't control so much.