Washington, D.C. – Dennis Kelleher, President and CEO of Better Markets, issued this statement following the introduction of Senators Warren and Vitter’s Bailout Prevention Act:
“The Federal Reserve Board ladled out tens of trillions of dollars in emergency bailouts to the financial system in response to the 2008 financial crash, with Wall Street’s biggest banks among the biggest recipients. Most of the Fed’s bailout programs had no meaningful transparency, oversight or accountability, violating the most basic principles of democracy and the rule of law. Making matters worse, these bailouts often rewarded reckless and irresponsible, if not illegal and criminal, high-risk behavior on Wall Street. Possible future similar actions by the Fed and others will only incentivize more of the same egregious conduct while institutionalizing the market-distorting too-big-to-fail business model of Wall Street’s biggest banks.
“While the much smaller $700 billion TARP program received widespread scrutiny, the Fed’s trillions in bailouts did not. In fact, the public and even its elected officials in Congress were mostly kept in the dark about these bailouts. That was wrong. The Dodd Frank Wall Street Reform and Consumer Protection Act made some modest changes to limit the Fed’s ability to bailout Wall Street in the future, but more needs to be done if taxpayers are to be protected, bailouts are to be limited, too big to fail is to be ended and market discipline is to apply to Wall Street like the rest of America’s banks and businesses. Doing that will be good for the American people, our markets and the Fed itself. This legislation is a good way to start that discussion. It will help bring more transparency, accountability and oversight to the too often secretive actions of the Fed. This must be done now, before the next crisis and before more bailouts.”
Better Markets is an independent, nonprofit, nonpartisan organization that promotes the public interest in financial reform in the domestic and global capital and commodity markets. Better Markets advocates for transparency, oversight and accountability with the goal of a stronger, safer financial system that is less prone to crisis and failure thereby eliminating or minimizing the need for more taxpayer funded bailouts. To learn more, visit www.bettermarkets.com.