Senators Brown & Vitter on GAO: “Too big to fail is not dead and gone at all”
Senator’s Sherrod Brown (D-Ohio) and David Vitter (R-La.) spoke with Bloomberg Television’s Peter Cook about a Government Accountability Office report on bank subsidies, financial regulation, and proposed legislation impose a 15 percent capital requirement on the largest banks.
Both Senators Brown and Vitter stress that the GAO report bolsters case that “too big to fail” is still a problem. Vitter said:
“I think this report is further ammunition that this is a continuing issue. Too big to fail is not dead and gone at all. It exists. The number goes up and down depending on the state of the economy, the state of risk, but it clearly exists.”
“I think it changes the debate in that it reinforces the case that Senator Vitter and I have been making that in times of crisis that investors will flock to the largest banks if they’re in a – if they think too big to fail still exists in investors. So it doesn’t matter what David and I think. What matters is the investors. The market thinks too big to fail is still with us. In times of bad economic crisis they’re going to go in greater number to the larger banks, again with getting even bigger subsidies than they get now.”
Source: Bloomberg Television