Senate progressives offer hope, if their amendment passes:
Stressing the need for more competition among smaller banks and increased business lending, the senators believe that the largest financial institutions present too much risk to our economy to keep them around. They have the support of the Main Street Alliance, a group of progressive-leaning small business owners who have advocated for strong financial reform and set themselves up in opposition to the Chamber of Commerce.
The bill's central points:
- Imposing a strict 10 percent cap on any bank-holding-company’s share of the United States’ total insured deposits
- Reducing the maximum amount of non-deposit liabilities at financial institutions (to 2 percent of United States GDP for banks, and 3 percent of GDP for non-bank institutions)
- Setting into law a 6 percent leverage limit for bank-holding companies and selected non-bank financial institutions
These steps would require several of the largest banks to, in effect, break themselves up to come in under the limits that this law would create. While most of the existing legislation in the House and Senate contains gestures toward these ideas, this is the first time they've been proposed as statutory limits, something called for by a number of public figures, including several Midwestern regional Federal Reserve presidents and former Fed Chair Paul Volcker.
Godspeed.
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