TOO BIG TO FAIL - Barney Frank vs Bernie Sanders

"Barney Frank takes on Bernie Sanders and the ‘too big to fail’ argument" PBS NewsHour 3/24/2016

Excerpt

SUMMARY:  It’s been a common theme this campaign season: Are our banks still too big to fail?  Former treasury official Neel Kashkari and presidential candidate Sen. Bernie Sanders have both shared their concerns with the NewsHour.  For another perspective on the argument, Jeffrey Brown talks to Barney Frank, former Democratic congressman and co-author of the regulatory Dodd-Frank bill.

JEFFREY BROWN (NewsHour):  In our first conversation, we talked with Neel Kashkari, president of the Federal Reserve Bank in Minneapolis.  As a Treasury official during the financial crisis, he helped oversee the bailout of the banks.  He now argues that the system remains in danger and that giant financial firms should be broken up.

That’s a view being heard on the campaign trail from Senator Bernie Sanders.

In his interview with Judy yesterday, here’s how he described the problem and his plan for it.

SEN. BERNIE SANDERS (VT-I), Democratic Presidential Candidate:  It will be important to point out that three out of the four largest banks in this country today are bigger than they were when we bailed them out because they were too big to fail, that you have the six largest banks in this country that have assets of 58 percent of our GDP.

I happen the believe that when you have a few financial institutions with unbelievable economic power, with unbelievable financial power, that what we should do is reestablish a modern Glass-Steagall legislation, and what we should do, in fact, is break them up, not only from a risk perspective of not seeing their greed and illegal behavior destroy our economy, as happened eight years ago, but also from creating a competitive financial system, where we don’t have so few financial institutions with so much power.

JEFFREY BROWN:  And we get a response now from one of the leading players in the aftermath of the financial crisis.

Barney Frank served as a Democratic congressman from Massachusetts from 1981 until his retirement in 2013.  As chairman of the House Financial Services Committee, he played a lead role in crafting the Dodd-Frank law, which enacted the most sweeping changes to U.S. financial regulation since the Great Depression.