Great news: “Too big to fail” banks even bigger now

Great news: “Too big to fail” banks even bigger now
April 16, 2012 by Ed Morrissey --HotAir


Way back in 2007, five big banks actually held assets equal to 43% of the U.S. economy !

Obama screamed the banks were "too big to fail" when he justified his bailout plans.

Obama also mentioned he would make them not be "too big to fail" in the future.
(apparently the Dodd-Frank laws were supposed to solve that)

But now the Federal reserve tells us that those big banks hold assets equal to 56% of the U.S. economy !

Strange how that worked out.

All while the 110th Congress (2007/2008) and 111th Congress (2009/2010) did nothing positive for the majority of American citizens.

The article focuses on Obama. Some will blame Bush for part of the problem.
Bush had to deal with the 110th Congress

Nancy Pelosi was Speaker of the House during both the 110th and 111th.

Two years after President Barack Obama vowed to eliminate the danger of financial institutions becoming “too big to fail,” the nation’s largest banks are bigger than they were before the credit crisis.

Five banks – JPMorgan Chase & Co. (JPM), Bank of America Corp., Citigroup Inc., Wells Fargo & Co., and Goldman Sachs Group Inc. — held $8.5 trillion in assets at the end of 2011, equal to 56 percent of the U.S. economy, according to the Federal Reserve.

Five years earlier, before the financial crisis, the largest banks’ assets amounted to 43 percent of U.S. output. The Big Five today are about twice as large as they were a decade ago relative to the economy, sparking concern that trouble at a major bank would rock the financial system and force the government to step in as it did during the 2008 crunch.

“Market participants believe that nothing has changed, that too-big-to-fail is fully intact,” said Gary Stern, former president of the Federal Reserve Bank of Minneapolis.

That specter is eroding faith in Obama’s pledge that taxpayer-funded bailouts are a thing of the past. It is also exposing him to criticism from Federal Reserve officials, Republicans and Occupy Wall Street supporters, who see the concentration of bank power as a threat to economic stability.

Obama made these pledges in early 2010 in support of the Dodd-Frank bill. That passed in the summer of 2010 with some bipartisan support. After more than 18 months in effect, the only impact this has had on “too big to fail” (TBTF) is to raise capital requirements and an “unwinding” plan in case of financial failure. Those plans have already been called “unrealistic” by former TARP Inspector General Neil Barofsky, who scoffed at the notion that an institution with more than $2 trillion in assets can be rationally “unwound,” and insists that the Obama administration has made “almost no progress” on ending TBTF.

There are some more ironic details in the story.

reply to post by xuenchen


That muffled sound you here coming from a politician is not flatulence, it's actually talking through their shorts.

Obama is bought and paid for by Wall Street. The FED making a noise is controlled opposition. The banks increasing in size is the natural progression of far too much BS and lack of government oversight. We have the same problem in the north, in Canadakastan. Our idiot politicians however just lied outright, gave 75 billion dollars to the banks while telling the public there were NO bailouts in Canadakastan. Like the FED and Treasury, the BOC and Treasury are controlled by Goldman Sachs and other banks beholding to the IMF.

It can't go much longer with all the artificial propping up and when the economy drops, it's going to go down like a ten dollar hooker being paid 20 bucks. It will make the 29 to 33 depression look like Disneyland.

Cheers - Dave

While i agree with the op on a great many things the only "too big to fail" that concerns me is the Government has grown too big to fail but that is the reason it is failing and the people are failing and the economy is failing.

While banks are wealthy the Government gets to sit there and define that wealth via many mechanisms legislaton such as frank dodd and the consumer protection agency and regulations and creations like the federal reserve which prints money and destroys wealth and sets the rates for every financial vehicle there is.

Banks just like people hold worthless pieces of paper and "money" that only exists in cyberspace.

Can't argue that banks have gotten bigger but there really is no tangilbe assets there.

The terms millionaire and billionaire and trillions have lost their meanings adjust for inflation the value of the dollar is meaningless as well.

Dodd-Frank was always setup to get gutted.

From Commondreams.org as to how the banks are handling this "reform":

They spread money like manure on the campaign trails of key members of Congress. They unleash hordes of lobbyists on Capitol Hill, cozy up to columnists and editorial writers, spend millions on lawyers who relentlessly pick at the law, trying to rewrite or water down the regulations required for enforcement. Before you know it, what once was an attempt at genuine reform creeps back toward business as usual.

It’s happening right now with the Dodd-Frank Wall Street Reform and Consumer Protection Act -- passed two years ago in the wake of our disastrous financial meltdown. Just last week, for example, both parties in the House overwhelmingly approved two bills that already would change Dodd-Frank’s rules on derivatives -- those convoluted trading deals recently described by the chairman of the Commodity Futures Trading Commission as "the largest dark pool in our financial markets."

The Best Congress the Banks’ Money Can Buy

Yuh-huh! The bill almost seems like a means for politicians to get more campaign contributions then any attempt to rein this sort of thing in.

Business as usual...and business is GOOD! (If you are a politician or banker anyhow.)

reply to post by Hessling



Have to agree there as well as Government gets bigger lobbying increases as well which means they are thrown more money via donations.

This country needs to go in the other direction smaller less powerful which means less money going to those idiots.