In the flurry of amendments to last week’s budget bill, the Senate voted by the remarkable tally of 99-0 for a “Too Big to Fail” proposal sponsored by the bipartisan trio of Sherrod Brown (D-Ohio), Bob Corker (R-Tenn.), and David Vitter (R-La.). Their amendment calls for steps to analyze and end the huge public subsidy that benefits the six largest banks – those with $500 billion or more in assets. Although the amendment is nonbinding, its overwhelming approval suggests growing support for action to end the era of taxpayer-subsidized megabanks.
Recent studies have put the ongoing funding subsidy to TBTF banks at $80-$100 billion a year. According to a Bloomberg analysis, JPMorgan, Bank of America, Citi, Wells Fargo, and Goldman Sachs account for $64 billion of total subsidy – “an amount roughly equal to their annual profits,” as Bloomberg points out. See AFR statement of support for Vitter-Brown-Corker.
“We’ve seen how too-big-to-fail is also too big to manage, too big to regulate, and too big to jail,” Senator Brown said in a statement issued before last week’s vote.
“This is a really impressive sign that we mean business on ending too-big-to-fail,” Senator Vitter declared afterward.
Vitter and Brown are working on the next step: legislation to require the megabanks to downsize, or face significantly higher capital and other requirements.