Sen. Bernie Sanders proposed legislation today that would break up the big banks and financial institutions that crashed the economy. The ending of too big to fail would also open the door to criminal prosecutions.
Sen. Sanders called ending too big to fail a matter of justice, “We have a situation now where Wall Street banks are not only too big to fail, they are too big to jail. That is unacceptable and that has got to change because America is based on a system of law and justice. In my view, no single financial institution should have holdings so extensive that its failure could send the world economy into crisis. At the very least, no institution, no CEO in America should be above the law. If an institution is too big to fail, it is too big to exist.”
The legislation makes its intended purpose clear, “Notwithstanding any other provision of law, beginning 1 year after the date of enactment of this Act, the Secretary of the Treasury shall break up entities included on the Too Big To Fail List, so that their failure would no longer cause a catastrophic effect on the United States or global economy without a taxpayer bailout.”
Too big to fail banks and financial institutions, which tanked the economy, are using their size as a defense against criminal prosecution. According to Sen. Sanders, the legislation would give the Treasury Department 90 days to identify commercial banks, investment banks, hedge funds and insurance companies whose failure would have a catastrophic effect on the stability of either the financial system or the United States economy without a government bailout.
This is a matter of both economic security and justice. The six largest financial institutions in the US control 2/3 of the country’s GDP. They hold 2/3 of all credit cards, half of all mortgages, and more than 40% of all bank deposits.
The same people who crashed the economy in 2008 now find themselves richer and bigger than ever. While people who now find themselves in poverty because of the Great Recession are being thrown into jail for missing a payment, the rich have gotten richer.
Rep. Brad Sherman (D-CA) will introduce companion legislation in the House, so that the pressure will be felt in both legislative bodies. Pressure is what this legislative initiative is all about. It is important that a message is sent to those who view themselves as above the law. Your size can’t hide your crimes, and too big to fail does not mean too big for jail.