Sen. Sanders wants to break up JP Morgan, Berkshire Hathaway and other large financials

Sen. Bernie Sanders

Getty Images
Sen. Bernie Sanders

Sen. Bernie Sanders wants to break apart giant financial companies including J. P. Morgan ChaseGoldman Sachs and Warren Buffett’s conglomerate Berkshire Hathaway, arguing their individual sizes expose the U.S. economy to too much risk.

The Vermont Independent and former presidential candidate introduced a bill on Wednesday that would require the breakup of any financial company that has a total exposure of greater than 3 percent of gross domestic product. Based on that threshold, which is $584 billion, six banks and the four non-banks would have to split up.

The banks include J. P. Morgan, Bank of AmericaCitigroup, Wells Fargo & Co., Goldman and Morgan Stanley. Non-banks include Berkshire as well as Prudential Financial, MetLife and American International Group.

The bill is co-sponsored in the House by California Democrat Rep. Brad Sherman.

It comes a decade after the collapse of Lehman Brothers and the near-collapse of AIG at the heart of the 2008 financial crisis. The federal government stepped in with a lifeline of $700 billion to buy faltering assets from banks and inject them with capital to weather the storm.

Had the “Too Big To Fail, To Big To Exist” bill been law back then it would have forced Lehman, with assets that were more than 4.4 percent of GDP, and Bear Stearns, with assets at 2.8 percent of GDP, to restructure.

This entry was posted in Banks. Bookmark the permalink.

Leave a Reply