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Senator Bernie Sanders challenged Attorney General Eric Holder in a speech on the Senate floor today.
Taking on Holder's statement that the Justice Department may not pursue criminal cases against big banks because filing charges could "have a negative impact on the national economy, perhaps even the world economy," Sanders declared that it is time to end the banks' stranglehold on our democracy.
"In other words," Sanders said, "we have a situation now where Wall Street banks are not only too big to fail, they are too big to jail." The Obama Administration should think long and hard about that, he added, "because America is based on a system of law."
Sanders announced he would introduce legislation to break up the largest financial institutions. The top six of these, he pointed out (J.P. Morgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley) have assets equal to two-thirds of the nation's gross domestic product.
Sanders's bill would give Treasury Secretary Jacob Lew 90 days to compile a list of commercial banks, investment banks, hedge funds and insurance companies that he deems too big to fail. The affected financial institutions would include "any entity that has grown so large that its failure would have a catastrophic effect on the stability of either the financial system or the United States economy without substantial government assistance."
Within one year after the law takes effect, the Treasury Department would be required to break up those banks, insurance companies, and other financial institutions identified by the secretary.
"If an institution is too big to fail, it is too big to exist," Sanders said. "No single financial institution should be so large that its failure would cause catastrophic risk to millions of American jobs or to our nation's economic wellbeing. No single financial institution should have holdings so extensive that its failure could send the world economy into crisis," Sanders said. "We need to break up these institutions because of the tremendous damage they have done to our economy.
If you liked this article by Ruth Conniff, the political editor of The Progressive, check out her story "Humane Budget from the Progressive Caucus".
Follow Ruth Conniff @rconniff on Twitter.