Sen. Bernie Sanders campaigning for president in 2016. (Photo: AP)
Sen. Bernie Sanders, I-Vt., introduced legislation on Wednesday to break up the nation's six biggest banks — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley.
Sanders' Too Big to Fail, Too Big to Exist bill would cap the size of the largest financial institutions so that a company's total exposure is no more than 3% of GDP, about $584 billion today, the bill states. The bill would also address large nonbank financial service companies such as Prudential, MetLife and AIG.
Rep. Brad Sherman, D-Calif., plans to introduce a companion bill in the House.
"No financial institution should be so large that its failure would cause catastrophic risk to millions of Americans or to our nation's economic well-being," Sanders said in a statement. "We must end, once and for all, the scheme that is nothing more than a free insurance policy for Wall Street: the policy of 'too big to fail.'"
As it stands now, the six largest banks in America "control assets equivalent to more than half the country's GDP and the four largest banks are on average about 80% larger today than they were before the bailout," Sanders said, noting the 10-year anniversary of the Wall Street bailout.
These "Too Big to Exist" institutions would no longer be eligible for a taxpayer bailout from the Federal Reserve and could not use customers' bank deposits to speculate on derivatives or other risky financial activities, Sherman added.
Sherman stated in the statement that JPMorgan Chase and Bank of America "would be forced to shrink to where the banks were in 1998."
