Bill to cap size of banks introduced in the Senate

A bill that would limit the size of the nation's financial institutions, ensure firms have money on hand to back up liabilities, boost lending to small businesses and prevent another economic collapse was introduced in the Senate on Wednesday.

Democratic Sens. Ted Kaufman (D-Del.), Sherrod Brown (D-Ohio), Bob Casey (D-Pa.) and Sheldon Whitehouse (D-R.I.) introduced the measure today that would impose a 10 percent cap on any bank-holding-company's share of the U.S.'s total insured deposits, reduce the amount of non-deposit liabilities to 2 percent of gross domestic product for banks and 3 percent for non-banks and set a 6 percent leverage limit for bank holding companies and select nonbank institutions. 

"If we're going to prevent big banks from putting our entire economy at risk, we need to place sensible size limits on our nation's behemoth banks," Brown said. "We need to ensure that if banks gamble, they have the resources to cover their losses."

The six largest U.S. banks hold assets totaling more than 63 percent of GDP, a release from Kaufman's office said. 

"Breaking apart too-big-to-fail banks is the necessary first step in preventing another cycle of boom-bust-and-bailout," Kaufman said. "This debate is a test of whether the power of that idea can spread and gain support."

The four Senators cited that Wall Street has received nearly $4.6 trillion in taxpayer support since the financial crisis began in 2008.