Vitter said that he and Brown are not ready to introduce legislation to fix the problem, but they are close.
“Wall Street has been allowed to run wild for years,” Brown said. “We simply cannot wait any longer for regulators to act.”
Brown and Vitter said that despite Dodd-Frank financial reforms following the banking crisis, large banks have continued to benefit, and that if another crisis hit, the banks would only be larger and need even more taxpayer dollar for a bailout. They said their bill would reduce the amount of capital and subsidies for large banks and likely cause them to restructure.
“I want to talk about the subsidy that these six largest banks get,” Brown said. “The market views their investments as not risky because the markets believe they are too big to fail because government would bail them out so they’re allowed to borrow at a lower interest rate. ... Only these six largest banks have that advantage ... they are in a sense being subsidized.”
Brown and Vitter have made calls in the past to help smaller community banks and vowed to continue that work during the 113th Congress.