Wall Street's Been So Obsessed With Elizabeth Warren It Missed The Real Threat In The Senate
The problem with that is it may have created a bit of tunnel vision. While Warren certainly has been outspoken in Senate Banking Committee hearings, other Senators have been taking action.
Yesterday, Senators Sherrod Brown (D-OH) and David Vitter (R-LA) both gave presentations on the floor of the Senate about ending "too big to fail."
Here's part of what Brown said (you can read the full text on his website):
Wall Street has been allowed to run wild for years. We simply cannot wait any longer for regulators to act.
These institutions are too big to manage, they are too big to regulate, and they are surely still too big to fail.
We cannot rely on the financial market to fix itself because the rules of competitive markets and creative destruction do not apply to the Wall Street megabanks.
Megabanks’ shareholders and creditors have no incentive to end “too big to fail” – they get paid out when banks are bailed out.
Taking the appropriate steps will lead to more mid-sized banks – not a few megabanks – creating competition, increasing lending, and providing incentives for banks to lend the right way.
Cam Fine, the head of the Independent Community Bankers of America, is calling for the largest banks to be downsized because he sees that his members are at a disadvantage.
Just about the only people who will not benefit from reining in these megabanks are a few Wall Street executives.
Congress needs to take action now to prevent future economic collapse and future taxpayer-funded bailouts.
I want to thank my colleague, Senator Vitter, who recognizes this problem and is joining me in doing something about it.
I am pleased to announce today that we are working on bipartisan legislation to address this “Too Big to Fail” problem.
It will incorporate ideas put forward by Tom Hoenig, Richard Fisher, and Sheila Bair.
Yep, legislation inspired by the writing of former FDIC Chairwoman, Sheila Bair. She's made no secret of her desire to see banks more regulated.
Politicians have been talking about ending too big to fail a lot more recently too. Ben Bernanke was grilled about it during testimony in the Senate and the House this week.
Another important thing to note about Brown that makes his speech that much more important, is that in 2010 he sponsored the SAFE Banking Act.
The law was defeated by a vote of 33-61, but its passage would've been crushing for Wall Street. The law put a 10% cap any bank's liabilities, leverage, and share of deposits in the United States, just to name a few measures.
So it looks like Brown's crusade has been reinvigorated and he has a Republican on his side too (Wall Street loves the word 'bipartisan'). Sure, Elizabeth Warren is someone to watch, but Wall Street better keep an eye on Brown and Vitter too. They're already on the move.
Watch Brown's presentation in the video below: