“Too-big-to-fail” legislation unveiled yesterday in Washington is needed to rein in the biggest U.S. banks because the Dodd-Frank Act has failed to guard taxpayers against future bailouts, the bill’s sponsors said.
The four largest banks -- JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co -- “are nearly $2 trillion larger than they were” before getting U.S. aid to help them weather the 2008 credit crisis, Senator Sherrod Brown said in a news conference.
At least six banks have assets exceeding the $500 billion threshold Vitter cited April 23 for the highest capital standard: JPMorgan, Citigroup, Goldman Sachs Group Inc. and Morgan Stanley, all based in New York, as well as Charlotte, North Carolina-based Bank of America and San Francisco-based Wells Fargo.
Supporters of the Brown-Vitter plan say further measures to curb risk are needed because Dodd-Frank failed to address the systemic threat posed by the largest banks. Bankers have said those seeking additional steps aren’t considering the regulations in the 2010 law including so-called living wills that will lay out how financial firms are to be unwound after a collapse and FDIC resolution authority for failed companies.