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April 10, 2013

If Wall Street beats Dodd-Frank, it could be the worst thing that ever happens to them

Is Washington likely to break up the country’s biggest banks? No, not right now. But perhaps soon.

Political momentum for dismantling them has been, in recent weeks, overstated. That unanimous vote in the Senate for a budget amendment critical of big banks? It was a nonbinding amendment to end “too-big-to-fail subsidies.” As it happens, there isn’t a line item in the federal budget titled “too-big-to-fail subsidies.” The vote was a freebie against the abstract concept of taxpayers subsidizing Wall Street — that’s why the outcome was unanimous. It was like a vote against halitosis.

Similarly, in a town starved for bipartisanship, the odd-bedfellows coalition of Sens. Sherrod Brown, a liberal Democrat, and David Vitter, a conservative Republican, has attracted quite a bit of media attention. But if you want to see even more bipartisanship, regard the huge, bipartisan effort to leave the biggest banks alone, which counts dozens of senators from both sides of the aisle among its supporters.

That said, those who dismiss efforts to break up the big banks as no more than a populist fantasy are missing the long game — and for opponents of a concentrated financial sector, the long game is going surprisingly well.”

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Read full Washington Post article here

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