Banks Seen Dangerous Defying Obama’s Too-Big-to-Fail Move

[No Elephants]

At the end of 2011, five banks held assets equal to 56% of the U.S. economy.

At the end of 2006, five banks held assets equal to 43% of the U.S. economy.

Wrong direction.

And three of those five years were on Geithner's watch. Actually, all of those five years were on Geithner's watch if you believe the program PBS is currently airing on Wall Street. However, he was only Secretary for three years.

Banks Seen Dangerous Defying Obama’s Too-Big-to-Fail Move
By David J. Lynch
April 16, 2012 2:02 PM EDT

Two years after President Barack Obama vowed to eliminate the danger of financial institutions becoming “too big to fail,” the nation’s largest banks are bigger than they were before the nation’s credit markets seized up and required unprecedented bailouts by the government.

Five banks -- JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), Citigroup Inc., Wells Fargo & Co. (WFC), and Goldman Sachs Group Inc. -- held $8.5 trillion in assets at the end of 2011, equal to 56 percent of the U.S. economy, according to central bankers at the Federal Reserve.

Five years earlier, before the financial crisis, the largest banks’ assets amounted to 43 percent of U.S. output. The Big Five today are about twice as large as they were a decade ago relative to the economy, sparking concern that trouble at a major bank would rock the financial system and force the government to step in as it did in 2008 with the Fed-assisted rescue of Bear Stearns Cos. by JPMorgan and with Citigroup and Bank of America after the Lehman Brothers bankruptcy, the largest in U.S. history.

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Simon Johnson, a former chief economist of the International Monetary Fund, blames a “lack of leadership at Treasury and the White House” for the failure to fulfill that promise. “It’d be safer to break them up,” he said.


The Obama administration rejects the criticism, citing new safeguards to head off further turmoil in the banking system. Treasury Secretary Timothy Geithner said in remarks on Feb. 2 the U.S. financial system is “significantly stronger than it was before the crisis.” He credits new regulations, including tougher capital and liquidity requirements that limit risk- taking by the biggest banks, authority to take over failing big institutions and prohibitions on the largest banks acquiring competitors.

Much, much more at http://www.bloomberg.com/news/2012-04-16/obama-bid-to-end-too-big-to-fail-undercut-as-banks-grow.html

Senator Sanders has said, "Too big to fail is too big to exist." As usual, I agree with Sanders.