Sanders’ Banking Breakup Plan

Recently Bernie Sanders has been accused of not having a plan for breaking up “Too Big To Fail” financial institutions.

You keep using that word. I do not think it means what you think it means.

Bernie has a plan. A complete plan. Part of it requires action under the existing Dodd-Frank legislation, the other part is laid out in detail in a pending bill he is sponsoring.

Anything else is a gross distortion.

Juan González: Clinton Has “Really Distorted” What Happened When NY Daily News Interviewed Sanders

Bernie and the Big Banks
Robert Reich
Saturday, April 9, 2016

The recent kerfluffle about Bernie Sanders purportedly not knowing how to bust up the big banks says far more about the threat Sanders poses to the Democratic establishment and its Wall Street wing than it does about the candidate himself.

Of course Sanders knows how to bust up the big banks. He’s already introduced legislation to do just that. And even without new legislation a president has the power under the Dodd-Frank reform act to initiate such a breakup.

Bernie Sanders isn’t the only one urging the big banks be broken up. Neel Kashkari, the new president of the Federal Reserve bank of Minneapolis – a Republican who used to be at Goldman Sachs – is also pushing to break them up, as has the former head of the Dallas Federal Reserve, among others.

Recall that just eight years ago the biggest banks were up to their ears in fraudulent practices – lending money to mortgage originators to make risky home loans laced with false claims, buying back those loans and repackaging them for investors without revealing their risks, and then participating in a wave of fraudulent foreclosures.

The biggest banks still haven’t even come up with acceptable “living wills,” required under Dodd-Frank to show how they’d maintain important functions while going through bankruptcy.

Meanwhile they continue to gamble with depositor’s money. Many of their operations are global, making it even harder for U.S. regulators to rein them in – as evidenced by JPMorgan Chase’s $6.2 billion loss in its “London Whale” operation in 2012.

The bottom line: Regulation won’t end the Street’s abuses. The Street has too much firepower. And because it continues to be a major source of campaign funding, no set of regulations will be tough enough.

So the biggest banks must be busted up.

Clinton Vs. Sanders on Big Banks

Yup, it includes the “shadow banking” sector too.

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