“The angry pitchfork brigade bent on breaking up the nation’s largest banks now includes unlikely members George Will and Peggy Noonan. Republicans at times outflank liberals in their zeal to downsize financial giants. And CPAC hosted a session at its convention on the threat posed by mega-banks.
But turn down the bipartisan Beltway static, and the true signal is clear: There is virtually no chance any significant piece of legislation will pass Congress that would meaningfully reduce the size of the nation’s biggest banks or restrict their activities.
It’s true the recent rise in break-up-the-banks fever could embolden regulators to get a little tougher in final Dodd-Frank rules, expected later this year. And a strange bedfellows, left-right coalition is now pressing for more dramatic action.
Still, there’s nothing on the horizon likely to satisfy those who say the biggest banks — led by JPMorganChase, Citigroup, Wells Fargo and Bank of America — continue to pose a systemic threat to the U.S. economy.
Proponents of dramatic reforms — such as reinstating the Glass-Steagall wall separating commercial and investment banking — are ready to pounce on any opportunity.
“The odds against [breaking up the banks] right now are great, but those odds can change dramatically and quickly,” said Dennis Kelleher, CEO of the aggressive pro-reform group Better Markets. “These banks really are one major blow up away from a massive political shift.”
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