Bernie Sanders Wants to Break Up JPMorgan, Bank of America, Morgan Stanley, Wells Fargo
Sen. Bernie Sanders, D-Vt., has introduced a bill to break up large financial companies, including firms with large wealth management divisions, according to CNBC.
The bill, introduced by the former presidential candidate Wednesday, would require the breakup of any financial institution whose total financial exposure exceeds 3% of the gross domestic product, the news website writes.
It’s unclear how the breakup would affect the companies’ wealth management operations. The threshold would also apply to four nonbanks: Berkshire Hathaway, Prudential Financial, MetLife and American International Group, the website writes.
Rep. Brad Sherman, D-Calif., is co-sponsoring the bill in the House, according to CNBC.
"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 says in a statement cited by the website. "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.’"
If Sanders’s bill were law before the 2008 financial crisis, Lehman Brothers would have been forced to restructure, as its assets represented over 4.4% of GDP at the time, the website writes. The law would also have applied to Bear Stearns, whose assets at the time represented 2.8% of GDP, according to CNBC.
Kevin Fromer, CEO of the Financial Services Forum, says the banking industry is now more resilient than it had been leading up to the crisis, the website writes.
"The banking industry and governments around the globe have made enormous strides during the past decade to ensure that large banks are safe and sound and that no institution is too big to fail,” he says in a statement cited by CNBC. “Policymakers must neither ignore the progress that has been made nor the essential role of large financial institutions in our economy."