John Cornyn: “I was very concerned when I read in the most recent publication of National Affairs comments from the inspector general…”

“I was very concerned when I read in the most recent publication of National Affairs comments from the inspector general of TARP--appointed to oversee that program that has now gotten completely out of control. More to the point, he says what has happened since September of 2008 is that we have seen further consolidation of the banking industry. Actually, he has said what has happened is that things have actually gotten worse as a result of the several mergers that have actually made banks larger. The implicit guarantee of moral hazard that we are not going to let these large institutions fail has contributed to them engaging in more and more risky conduct. The problem with too big to fail and these large institutions, particularly large banks with assets of over $100 billion, is that they can actually borrow money cheaper than community banks in Texas or New York or Connecticut or elsewhere, and they actually represent a $34 billion subsidy to the largest 18 banks in America because this bill does nothing to eliminate the concept of too big to fail. Indeed, in many ways, it makes it worse. It institutionalizes the concept.”