Senator Introduces Bill to Break Up Big Banks

In response to a recent remark by Attorney General Eric H. Holder, Jr., Senator Bernie Sanders (I-VT) has introduced Senate legislation aimed at breaking up banks regarded as "to big to fail."   Holder had said his Justice Department may not pursue criminal cases against big banks because filing charges could "have a negative impact on the national economy, perhaps even the world economy."

Sanders said of his bill, "We have a situation now where Wall Street banks are not only too big to fail, they are too big to jail.

The bill, currently titled the "Too Big to Fail, Too Big to Exist Act.'' was simultaneously introduced into the House by Brad Sanders (D-CA).  If enacted it would give the Treasury Department 90 days to identify commercial banks, investment banks, hedge funds and insurance companies "that the Secretary believes are too big to fail, which shall include, but is not limited to any United States bank holding companies that have been identified as systemically important banks by the Financial Stability Board" and whose "failure would have a catastrophic effect on the stability of either the financial system or the United States economy without substantial government assistance."

The bill would then mandate the Treasury secretary to break up the identified entities so that that failure of any one would "no longer cause a catastrophic effect on the United States or global economy without a taxpayer bailout."