Too-Big-To-Fail remains the default state of Wall Street

One of the few amendments to the financial reform bill that had any teeth went down to defeat today.

A move to break up major Wall Street banks failed Thursday night by a vote of 61 to 33.
Three Republicans, Richard Shelby of Alabama, Tom Coburn of Oklahoma and John Ensign of Nevada, voted with 30 Democrats, including Senate Majority Leader Harry Reid of Nevada, in support of the provision. The author of the pending overall financial reform bill in the Senate, Banking Committee Chairman Christopher Dodd, voted against it.
The amendment, sponsored by Sens. Sherrod Brown (D-Ohio) and Ted Kaufman (D-Del.), would have required megabanks to be broken down in size and capped so that their individual failure would not bring down the entire system.
Under Brown-Kaufman, no bank could hold more than 10 percent of the total amount of insured deposits, and a limit would have been placed on liabilities of a single bank to two percent of GDP.

If it had passed the top six banks would had to have been broken up to some degree.
Instead, TBTF remains, and that means another bailout at some point in the future.

Subject Meta: 

Forum Categories: 

I don't know about this one frankly

I agree they should be broken up but the issue for me was the criteria, i.e. percentage of GDP. I'm not sure if that was so great. I was thinking Volcker Rule, reinstate Glass-Steagall and a heavy rein in derivatives was in order, then maybe revisit it with things like the normal monopoly break-ups that worked on AT&T. Problem there is Microsoft Anti-trust, once Bush was in office, magically "went away". Of course technological advances made Microsoft mute, although AT&T squished a lot of technological advances.

Anyway, I would have voted for it but it's not as bad to me as the derivatives gutting and now the Fed audit gutting.

The Banksters to me are operating as a cartel.

You must have Javascript enabled to use this form.