Too-Big-To-Fail Is Back on Senate Agenda With ‘Megabank’ Hearing

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Too-Big-To-Fail Is Back on Senate Agenda With ‘Megabank’ Hearing

Bloomberg – Too-big-to-fail banks are back on the U.S. Senate’s agenda.

Senator Sherrod Brown, an Ohio Democrat who co-wrote a proposal last year to limit the size of banks, plans to hold a hearing today on “new oversight authority to shield Main Street from Wall Street megabank risk,” according to a statement from his office. Former Federal Deposit Insurance Corp. Chairman Sheila Bair, who has said that governments around the world are propping up a bloated financial system, will be a witness.

Last year’s Dodd-Frank Act gave the FDIC authority to close large failing financial firms, and Federal Reserve officials say new rules will force the biggest banks to boost capital, making failure less likely.

“For too long, Wall Street has been permitted to operate in the dark, putting our economy at risk and leaving taxpayers on the hook,” Brown said yesterday in an e-mailed statement.

The hearing will be held by the Senate Subcommittee on Financial Institutions and Consumer Protection, which Brown heads. Other witnesses include Phillip Swagel, a former assistant secretary at the U.S. Treasury Department who’s now a professor at the University of Maryland, and Simon Johnson, a former chief economist at the International Monetary Fund, according to Brown’s office.

Brown said the Fed failed to answer questions he posed in August about Berkshire Hathaway Inc.’s $5 billion investment in Charlotte, North Carolina-based Bank of America Corp. The Fed responded last week, saying it couldn’t provide “confidential supervisory information,” according to Brown.

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