Release: Sanders Blasts Obscene Pay on Wall Street, Calls for Breakup of ‘Too Big to Fail’ Banks
October 12, 2010
BURLINGTON, Vt., Oct. 12 – Citing a study that found Wall Street pay packages are set to break a record for a second straight year, Sen. Bernie Sanders (I-Vt.) revived a push to break up financial institutions deemed “too big to fail.”
Wall Street banks, investment banks, hedge funds and other financial firms are set to pay $144 billion in compensation and benefits this year, a 4 percent increase from the record-breaking $139 billion paid out in 2009, according to the survey by The Wall Street Journal.
“Wall Street caused the economic disaster that led to the loss of more than 8 million American jobs. At a time when the middle class is disappearing due to the greed and recklessness on Wall Street, it is unconscionable that big banks are rewarding the same executives that caused the worst financial crisis since the 1930s with record-breaking pay packages,” Sanders said. “Instead of doling out huge bonuses, Wall Street should be investing much of this money into the job-creating productive economy. These Wall Street executives would not have jobs today if working-class taxpayers did not bail them out.
“Something is profoundly wrong” Sanders added, “when nearly 40 percent of all profits produced by our economy go to financial services while the manufacturing base that once made the American middle class the envy of the world is collapsing.”
The pay packages for the financiers whose greed and recklessness caused the worst recession since the 1930s provides fresh evidence that the system still needs radical reform, according to Sanders. “They have done enough damage,” he said
The senator plans to reintroduce the Too Big To Fail, Too Big To Exist Act that would require the Treasury Department within one year to break up commercial banks, investment banks, hedge funds and insurance companies that have grown so large that a failure would have a catastrophic effect on the financial system or the U.S. economy without substantial government assistance. “At a time when my Republican colleagues are expressing great concern about ‘big government,’ I hope they will also express concern about the incredible concentration of ownership in the ‘big banking industry’.”
Three out of the four largest banks in America (JP Morgan Chase, Bank of America, and Wells Fargo) are now larger than before the bailout. The four largest banks in America have assets equal to more than 50 percent of the entire annual U.S. gross domestic product. These four big banks now issue two-thirds of all credit cards, half of the mortgages and control nearly 40 percent of all bank deposits. Just five American banks (JP Morgan Chase, Bank of America, Citigroup, Goldman Sachs, and Morgan Stanley) own a staggering 95 percent of the $290 trillion in risky derivatives held at commercial banks.