A critical function of our banking system is financing small businesses. But big banks are doing a rotten job of it. At the nation’s largest banks, small business lending has plunged 33% since 2009. Trying to cajole or compel them to do more won’t make much difference because the problem is largely inherent to their scale. Continue reading
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Introduced by Senator Sherrod Brown on May 9, 2012, the following bill would place size and leverage limits on big banks, forcing the largest four banks in the country to downsize. Continue reading
More than three years after their reckless greed triggered the Great Recession, the nation’s biggest banks have paid almost no penalty and are bigger than ever, as these two graphs illustrate. Continue reading
In 1994, Congress adopted a policy that bars a bank from buying another bank if the combined entity would hold more than 10 percent of the country’s deposits, but the policy has several flaws that have allowed at least two banks to exceed the cap. Continue reading
Not one to let a good crisis go to waste, Bank of America managed, in the dark days of 2008, to parlay its own insolvency and near collapse into attaining something it had long dreamed of: federal approval to bypass a national law that says that no bank may acquire another bank if it would end up holding more than 10 percent of the country’s deposits.
Now, at long last, a new Senate proposal calls for reinstating strict size caps. It would mean disassembling at least five big banks.
Federal law prohibits banks from amassing, through mergers and acquisitions, more than 30 percent of the deposits in any one state. The law also gives each state the authority to raise or lower its own cap, or to abolish it altogether. Here we list the cap adopted by each state. Continue reading
Here’s the text of the federal law capping the share of deposits a bank may hold. Continue reading