Buzzed about in banking circles for weeks, senators Sherrod Brown (D-OH) and David Vitter (R-LA) and Brown have finally unveiled legislation they claim would end “too big to fail” policies. It subjects some of the largest banks to a 15 percent capital reserve and pushes the U.S. to move beyond the international banking accord known as Basel III.
Citing a need for reform, the two, during a press conference on Wednesday, pointed out that despite receiving assistance from taxpayers in 2008, the nation’s four largest banks—JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo—are nearly $2 trillion larger today than they were before the financial crisis. The promise of federal bailouts allows “the nation’s largest megabanks to borrow at a lower rate than regional banks, community banks, and credit unions,” a “funding advantage” estimated to be as high as $83 billion per year, they claimed in a statement.
