Sen. Bernie Sanders, I-Vt., has announced that he will introduce legislation to break up the so-called ‘too big to jail’ banks. Sanders' proposed legislation comes in response to recent comments by U.S Attorney General Eric Holder that the criminal prosecution of executives of the nation's largest financial institutions could lead to the eventual collapse of the global economy.
‘In other words, we have a situation now where Wall Street banks are not only too big to fail, they are too big to jail,’ Sanders says. ‘That is unacceptable and that has got to change, because America is based on a system of law and justice.’
Sanders' legislation would give the Secretary of the Treasury 90 days to compile a list of commercial banks, investment banks, hedge funds and insurance companies that he deems too big to fail. The affected financial institutions would include ‘any entity that has grown so large that its failure would have a catastrophic effect on the stability of either the financial system or the U.S. economy without substantial government assistance.’ Within one year after the legislation became law, the Treasury Department would be required to break up those banks, insurance companies and other financial institutions.
‘If an institution is too big to fail, it is too big to exist,’ Sanders says. ‘No single financial institution should be so large that its failure would cause catastrophic risk to millions of American jobs or to our nation's economic well-being. No single financial institution should have holdings so extensive that its failure could send the world economy into crisis,’ Sanders said. ‘We need to break up these institutions because they have done of the tremendous damage they have done to our economy.’