Bernie and the Big Banks (Robert Reich 4/10/16)
"The recent kerfluffle about Bernie Sanders purportedly not knowing how to bust up the big banks says far more about the threat Sanders poses to the Democratic establishment and its Wall Street wing than it does about the candidate himself. Of course Sanders knows how to bust up the big banks. Hes already introduced legislation to do just that. And even without new legislation a president has the power under the Dodd-Frank reform act to initiate such a breakup. But Sanders threatens the Democratic establishment and Wall Street, not least because hes intent on doing exactly what he says hell do: breaking up the biggest banks."
left the most important decisions to regulatory agencies.
Since then, platoons of Wall Street lobbyists, lawyers and litigators have been watering down and delaying those regulations.
For example, Dodd-Frank instructed the Commodity Futures Trading Commission to reduce certain risks, but the Street has sabotaged the process.
In its first major rule under Dodd-Frank, the CFTC considered 1,500 comments, largely generated by and from the Street. After several years the commission issued a proposed rule, including some of the loopholes and exceptions the Street sought.
Wall Street still wasnt satisfied. So the CFTC agreed to delay enforcement of the rule, allowing the Street more time to voice its objections. Even this wasnt enough for the big banks, whose lawyers then filed a lawsuit in the federal courts, arguing that the commissions cost-benefit analysis wasnt adequate.
As of now, only 155 of the 398 regulations required by Dodd-Frank have been finalized. And those final versions are shot through with loopholes big enough for Wall Streets top brass to drive their Ferraris through.
The biggest banks still havent even come up with acceptable living wills, required under Dodd-Frank to show how theyd maintain important functions while going through bankruptcy.
Meanwhile they continue to gamble with depositors money. Many of their operations are global, making it even harder for U.S. regulators to rein them in as evidenced by JPMorgan Chases $6.2 billion loss in its London Whale operation in 2012. Citigroup alone has over 2,000 foreign subsidies.
The bottom line: Regulation wont end the Streets abuses. The Street has too much firepower. And because it continues to be a major source of campaign funding, no set of regulations will be tough enough.
So the biggest banks must be busted up.'