The Buck Stops With Obama on Tepid Financial Reform

[Leme]

9. you also did a partial quote of elizabeth warren

it continues
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Even so, the law is not perfect. And so it’s important to ask: Where are we now, five years after
the crisis hit and three years after Dodd-Frank?
There are many issues to discuss—and I’m sure you will get to them in the panel that follows
this speech. But I’d like to focus on one in particular.
Where are we now on the “Too Big to Fail” problem? Where are we on making sure that the
behemoth institutions on Wall Street can’t bring down the economy with a wild gamble? Where
are we in ending a system that lets investors and CEOs scoop up all the profits in good times, but
forces taxpayers to cover the losses in bad times?
After the crisis, there was a lot of discussion about how Too Big to Fail distorted the
marketplace, creating lower borrowing costs for the largest institutions and competitive
disadvantages for smaller ones. There was talk about moral hazard and the dangers of big banks
getting a free, unwritten, government-guaranteed insurance policy.
Sure, there was talk, but look at what happened: Today, the four biggest banks are 30% larger
than they were five years ago. And the five largest banks now hold more than half of the total
banking assets in the country. One study earlier this year showed that the Too Big to Fail status
is giving the 10 biggest US banks an annual taxpayer subsidy of $83 billion.
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Wow. Who would have thought five years ago, after we witnessed firsthand the dangers of an
overly concentrated financial system that the Too Big to Fail problem would only have gotten
worse?
There are many who say, “Sure, Too Big to Fail isn’t over yet, but Congress should wait to act
further because the agencies still have to issue a bunch of Dodd-Frank’s required rules.” True,
there are rules left to be written, but that’s because the agencies have missed more than 60
percent of Dodd-Frank’s rulemaking deadlines.
I don’t understand the logic. Since when does Congress set deadlines, watch regulators miss
most of them, and then take that failure as a reason not to act? I thought that if the regulators
failed, it was time for Congress to step in. That’s what oversight means. And that’s certainly a
principle that would have served our country well prior to the crisis.
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http://www.warren.senate.gov/files/documents/Better%20Markets%20Speech.pdf