House Financial Services Committee Hearing Offers Support for Brown-Vitter’s Break Up the Banks Bill
“Many talk about wanting to end too big to fail and claim to be tough on Wall Street, but few support real, concrete action to turn rhetoric into reality like the witnesses at today’s HFSC hearing. They have supported crucial aspects of ‘Terminating Bailouts for Taxpayer Fairness Act of 2013,’ the key Senate bill to end the need to rescue Wall Street megabanks offered by Senators Brown and Vitter in April. This bill addresses many problems of the ‘too big to fail’ banks by narrowing safety net coverage and restricting large bank leverage,” said Dennis Kelleher, President and CEO of Better Markets, Inc., a nonprofit organization that promotes the public interest in the financial markets.
“FDIC Vice Chairman Thomas Hoenig and Dallas Fed President Richard Fisher both have advocated restricting the federal safety net to commercial banking, excluding derivatives dealing and similar activities from government protection. Former FDIC Chair Shelia Bair has advocated raising large bank equity ratios into the 8 to 16 percent range. Safety net restrictions and leverage limits are crucial elements of Brown-Vitter,” Mr. Kelleher said.
“Chair Hensarling and his colleagues should follow the lead of Brown-Vitter and do more than say they are against the too big to fail megabanks. They should introduce a bill in the House that includes, at a minimum, meaningful leverage limits like those in Brown-Vitter that will reduce the likelihood of bank rescues. Enough rhetoric. The American people deserve real action now,” Mr. Kelleher concluded.
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.