U.S. Senator Bernie Sanders of Vermont has just filed a two-page bill.
The filing of a two-page bill in Congress should be news no matter what its contents, but in this case the size of the problem the bill addresses is as awe-inspiring as its brevity.
Sanders' bill would get rid of financial institutions that are "too big to fail."
First, the bill orders the Secretary of the Treasury to draw up a list of "all commercial banks, investment banks, hedge funds and insurance companies" his agency considers too big to fail—companies that would bring down the entire economy if they went bankrupt—within 90 days after the bill is enacted.
Within a year after the bill is enacted, Treasury would have to break those companies up into smaller entities that wouldn't take the system under if they went bust.
The task is urgent, Sanders told The Nation reporter Katrina Vanden Heuvel, because "three out of the four largest financial institutions that were too big to fail are now bigger than they were before. Which puts us in a position to see next time around an even larger bailout."
Naming names, Sanders pointed out that the nation's four largest banks, Bank of America, Wells Fargo, J.P. Morgan Chase and Citigroup, now write half of all mortgages, hold four out of every 10 bank deposits and issue two-thirds of the nation's credit cards. "So you have these large banks charging people 25, 30 percent interest rates, which is just unconscionable," Sanders told The Nation. "And I think the fact that you have four large banks issuing 2 out of 3 credit cards clearly contributes to those outrageously high rates."
In the House, Rep. Paul Kanjorski (D-Pa.), chairman of that chamber's Financial Services Subcommittee on Capital Markets, last week proposed an amendment that would let regulators break up large financial firms and curtail their mergers and acquisitions even if they are financially sound."
