Last month, Senator Elizabeth Warren (D-MA) clashed with Fed chairman Ben Bernanke about “too big to fail” banks and the $83 billion subsidy the biggest banks receive because investors believe the government would bail out the largest financial institutions again if necessary. Bernanke argued that Dodd-Frank had given the government tools that could handle the failure of a megabank without taxpayer support — even though the legislation was seriously weakened by Senator Scott Brown on behalf of the Wall Street titans who now employ him.
Bernanke clarified his position on Wednesday and it seems he agrees with Warren that more needs to be done to fix the situation. “I agree with Elizabeth Warren 100 percent that it’s a real problem,” he said.
“Too big to fail was a major source of the crisis,” he added, “and we will not have successfully responded to the crisis if we do not address that successfully.”
The Fed chair’s admission follows Attorney General Eric Holder telling the Senate Banking Committee that the massive size of America’s largest financial institutions prevents the government from prosecuting financial crimes they may have committed.
There is definitely a conservative case against “too big to fail.” Bernanke was a registered Republican before he took over his nonpartisan position at the Fed. But there are definitely Republicans who believe something needs to be done to constrain the big banks that are bigger now than they were before the crisis.
Here are 5 other members of the Grand Old Party who want to break up the big banks.