U.S. Sens. Sherrod Brown (D-OH) and David Vitter (R-LA) today addressed a statement by members of the financial services industry that challenges the existence of the subsidy that "too big to fail" megabanks receive by virtue of their size. Brown and Vitter have successfully urged the Government Accountability Office (GAO) ) to conduct a study of the economic benefits that the "too-big-to-fail" megabanks receive as a result of actual or perceived taxpayer funded support.
"It comes as no great surprise that the megabanks' trade associations think the Too Big To Fail problem is behind us," Brown said. "But experts who are not paid by the megabanks, from Federal Reserve Chairman Ben Bernanke to Treasury Secretary Lew Jack Lew to Attorney General Eric Holder have all concluded that a subsidy remains. The trade groups' actions speak loudest: instead of supporting a bill to have GAO study this issue, some of them worked to kill it in the House of Representatives."
"Despite the claims made by the paid cheerleaders of the megabanks, Too Big To Fail is alive and well, and the banks receive taxpayer subsidies," Vitter said. "Chairman Bernanke knows it, the market knows it, and the taxpayers know it. This is exactly what we believe our GAO study we got will get to the bottom of -- the facts."
Brown and Vitter have also urged the Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) to simplify and strengthen capital rules for banks.