WASHINGTON — Declaring that “the time is now” to break up the largest banks, Sen. Bernie Sanders, I-Vt., unveiled a bill Wednesday that would cap a financial institution’s total exposure at 3% of the nation’s GDP.
Firms exceeding that cap would be unwound. A summary of the bill said it would result in the breakup of the six largest financial institutions, which currently have a combined exposure of 68% of GDP.
“Today, the four largest financial institutions in this country are on average 80% larger than they were before we bailed them out,” Sanders, a 2016 presidential contender, said in an online video to unveil the bill. He was joined by Rep. Brad Sherman, D-Calif., who will introduce a companion bill in the House.
The six institutions exceeding the cap, according to the summary, are JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs, Bank of America and Morgan Stanley. The bill would also require insurance companies and other nonbanks with more than $50 billion of assets to report their total exposures to regulators.
Companies exceeding the 3% cap would have two years to undergo a restructuring. A breakup would be overseen by the Federal Reserve Board’s vice chair of supervision, or the Fed chair in the case that no vice chair is appointed.
