The Man Behind the SAFE Banking Act on Fixing Wall Street

By Jennifer Schonberger | More Articles
May 20, 2010 | Comments (0)

"If they're too big to fail, they're too big," former Federal Reserve Chief Alan Greenspan, normally a proponent of self-regulation, said in a speech last year about the size of banks.

Since the crisis, our biggest banks have only gotten bigger. Of the 8,195 banks in the country, four -- JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America -- control almost 40% of the nation's deposits. Along with Goldman Sachs and Morgan Stanley, they control 63% of the nation's GDP in assets.

Yet in a 61-to-33 vote, the Senate voted down an amendment that would have capped the size and leverage of banks in this country. That amendment, dubbed the SAFE Banking Act, was proposed by Sen. Ted Kaufman, D-Del. In an interview, Sen. Kaufman told me he doesn't think we've solved the problem of "too big to fail" as the financial-reform bill stands, but despite the defeat of his amendment, there is still hope for real reform. Here is our edited conversation.

This is the first of three segments of Jennifer's interview with Senator Kaufman. Stay tuned for his thoughts on cracking down on financial fraud and the flash crash.

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Fool contributor Jennifer Schonberger owns shares of Bank of America but of no other companies mentioned in this article. You can follow her on Twitter. The Motley Fool has a disclosure policy.

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