Legal Commentary

Break Up The "Too Big To Fail" Banks

By Big Tent Democrat

So say Sens. Sherrod Brown (D-OH), Bob Casey (D-PA), Ted Kaufman (D-DE) and Sheldon Whitehouse (D-RI):

Sens. Sherrod Brown, Ted Kaufman, Robert Casey and Sheldon Whitehouse are introducing a new financial-reform bill, the Safe Banking Act of 2010, to limit the size of the banks -- and, in the process, break up existing firms.

[. . .] The bill's central points:

* Imposing a strict 10 percent cap on any bank-holding-company’s share of the United States’ total insured deposits
* Reducing the maximum amount of non-deposit liabilities at financial institutions (to 2 percent of United States GDP for banks, and 3 percent of GDP for non-bank institutions)
* Setting into law a 6 percent leverage limit for bank-holding companies and selected non-bank financial institutions

These steps would require several of the largest banks to, in effect, break themselves up to come in under the limits that this law would create.

I fully endorse this proposal. It is precisely what is needed.

Speaking for me only

Full post as published by TalkLeft on April 21, 2010 (boomark / email).