Thursday, May 02, 2013

Break up the Too Big To Fail banks

Don't want to get too excited about this just yet, but it's the best shot at killing the Too Big To Fail beast I've seen so far.
Last week, on April 24th, Democratic Senator Sherrod Brown of Ohio and Louisiana Republican David Vitter introduced legislation called the "Terminating Bailouts for Taxpayer Fairness Act of 2013 Act," or the "Brown-Vitter TBTF Act" for short. The bill is a gun aimed directly at the head of the Too-Big-To-Fail beast.
Who knows if they'll get anywhere with it. Big Finance will be throwing around a lot of big money to stop them. But there are quite a few surprise supporters including some Republicans and The Independent Community Bankers of America. The latter have been reluctant to take sides until now. And it surely sounds like a real fix in this telling.
Studies have shown that these banks borrow money at about 0.8 percent more cheaply than other banks, and that this implicit government subsidy is worth about $83 billion a year just to the top 10 banks in America. This bill would essentially wipe out that hidden subsidy and make the banks bailout-proof.
If it worked it would be a big step in restoring some balance to the national, and international, economy.

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Blogger Daro said...

Vitter? The object of ridicule by The Young Turks, Dangerous Minds and others? Colour (UK spl!) me shocked. It'll be interesting to see if the liberal blogosphere pay him credit for this.

10:38:00 PM  
Blogger merlallen said...

Is Diaper Dave about to retire or something? Anyway, good for him.

1:00:00 PM  
Blogger Libby Spencer said...

If you read the whole link, there are a surprising number of conservatives supporting this all of a sudden. Which makes me wonder if it's really all that, but in any event, it's too soon to tell how serious they are. Often these bills are filed for messaging rather than a serious attempt at reform.

1:12:00 PM  

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