Big banks’ disproportionate reliance on U.S. aid after the credit crisis reinforces the need for additional steps to ensure the end of too big to fail, Senators Sherrod Brown and David Vitter said.
Brown and Vitter, co-sponsors of a plan to impose a 15 percent capital requirement on the biggest lenders, commented after the release yesterday of a Government Accountability Office study that showed such firms made greater use of bailout programs introduced after markets collapsed in 2008.
The GAO findings represent the first of two reports responding to a request by Brown, an Ohio Democrat, and Vitter, a Louisiana Republican, to put a dollar figure on the benefit derived from U.S. aid by the largest bank holding companies. The number sought by the lawmakers, who say the big banks have grown by $2 trillion since the crisis, will be included in a second report next year, the GAO said.
“If big banks want to continue risky practices, they should do so with their own equity on the line,” Brown said in a statement. The GAO’s work “underscores the need to pass our legislation to ensure that these types of bailouts will not happen in the future by imposing sensible capital requirements.”
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