Political Quotes

“Mr. President, there is broad agreement that overleveraged financial institutions significantly contributed, to put it mildly, to the 2008 financial crisis and that they were bailed out because everyone knows they are too big to fail. Years later--5 years later now--there is an implicit assumption that the largest megabanks--the five or six largest banks in the country-- are still too big to fail. That means the markets give them funding advantages that experts estimate are as high as 50 or 60 or 70 or even 80 basis points. That means when they go in the capital markets, they can borrow money at close to 1 percent. Eighty-eight basis points is fourth-fifths of 1 percent. They can borrow money at a lower cost than virtually anyone else in our economy. Studies from Bloomberg have shown that this can mean a subsidy of upward of $80 billion to these five, six, seven megabanks--these large megabanks. Last year, as a result, my colleague Senator Vitter and I began to push the banking regulators--the Federal Reserve, the Office of the Comptroller of the Currency, and the FDIC, the Federal Deposit Insurance Corporation--to use stronger capital and leverage rules to end this too-big-to-fail subsidy. There is now bipartisan agreement that imposing more stringent capital and leverage requirements for the largest financial institutions could help prevent the next financial crisis and prevent future bailouts.…”