JPMorgan Chase’s $2 billion bad bet has made it crystal clear: The Wall Street banksters are still recklessly gambling with government-guaranteed money. And the too-big-to-fail banks are still too big.
It is time for Congress to act. Tell Congress to break up the big banks by passing Sen. Sherrod Brown and Rep. Keith Ellison’s SAFE Banking Act. That legislation is the one tool on the table that will cut too-big-to-fail banks down to size.
When President Obama signed Wall Street reform into law two years ago, one crucial piece was missing: a cap on how big banks can get. The bank lobby defeated all efforts to include a limit on their size.
Now the six largest banks – led by JPMorgan Chase – are collectively bigger and more concentrated than they were before they blew up the economy, with the assets they control growing from $6.1 trillion before the collapse to more than $8.5 trillion today, according to Federal Reserve data.
With these behemoths, regulation is not enough. Legions of Wall Street lobbyists have successfully delayed and diluted regulations that were supposed to flow from the Wall Street reform bill. And the big banks will always push their way around any barriers.
We need a fail-safe. If a bank can’t be too big, then it can’t be too big to fail— no matter what the lobbyists do.
SAFE (Safe, Accountable, Fair and Efficient) Banking Act sponsors Sen. Sherrod Brown and Rep. Keith Ellison are featured speakers at the June 18-20 Take Back the American Dream conference. (Click here to register.) Their SAFE ACT would put firm limits on how big any bank can get. Among the provisions are that no bank could hold more than 10 percent of all of the insured bank deposits in the country, nor could a bank holding company have non-deposit liabilities greater than 2 percent of the nation's gross domestic product.
By the standards in the SAFE Banking Act, four existing banks are currently above the size cap—JPMorgan Chase, Bank of America, Citigroup and Wells Fargo—and would have to shrink. This would be a major step in making banking sober—and boring, as it should be—again.
But though there is broad agreement that "too big to fail is too big to exist," the banking industry's allies in the Republican Party are putting up a big fight.
Republican National Committee Chairman Reince Priebus said on Meet the Press that in the wake of the JPMorgan Chase losses, "I think we need less" regulation, not more.
Just this week, Republicans on the House Financial Services committee were scheduled to take up a series of bills that would have eviscerated the financial reform legislation. The publicity around the massive JPMorgan Chase losses prompted them to postpone their legislative mark-up, but only until the heat cools on the issue.
We need to keep the heat on. The lousy multibillion dollar bet by JPMorgan Chase has made it clear Wall Street hasn’t learned its lesson. We need to act now before the they blow up the economy again.
Click here to tell Congress: Break up the big banks! Pass Sen. Sherrod Brown and Rep. Keith Ellison’s SAFE Banking Act.
Take the fight to Congress today, and then join Sen. Brown, Rep. Ellison and other leaders from around the country in Washington as we demand an agenda to restore the middle class at the June 18-20 Take Back the American Dream conference
Wall Street may not want to learn from their mistakes. But we have. We won’t sit back while they blow up the global economy again. Not this time. Join us.