Elizabeth Warren Grills Fed Chairman Over 'Too Big to Fail' Banks
Sen. Elizabeth Warren, D-Mass., a two-time Truthdigger of the Week, demonstrated once again why big banks and Wall Street want to keep their distance from her when she took on Ben Bernanke during his semiannual appearance before the Senate Banking Committee on Tuesday. Less than two weeks after interrogating and shaming government regulators for not prosecuting the financial institutions that played cruical roles in the economic meltdown, the freshman senator went after the chairman of the Federal Reserve over government policies that allowed the largest banks in the U.S. to become “too big to fail.”
The Huffington Post:
Though Bernanke questioned the accuracy of the $83 billion figure, he admitted that big banks get some subsidy. But he said the market was wrong to give banks any subsidy at all (in the form of lower borrowing costs), insisting that the government will in fact let banks fail. The 2010 Dodd-Frank financial reform law has given policymakers the tools to safely shut down big, failing banks, he claimed.
But when repeatedly pressed by Warren, Bernanke’s confidence seemed to waver.
…Warren also pointed out that big banks are probably loath to give up any market subsidy — $83 billion or otherwise.
“Big banks are getting a terrific break, and little banks are just getting smashed,” Warren said.
“I agree with you 100 percent,” Bernanke said.
— Posted by Tracy Bloom.