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View Diary: Sen. Bernie Sanders to Introduce Bill to Break Up Too Big To Fail Banks (99 comments)

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  •  There are Democrats and Republicans (14+ / 0-)

    who want to take care of this, too. Even my senior Senator, Ron Johnson, wants to do something about it, and he is clueless.

    My approach would be, to start:

    1. Universal (deposit-taking and investment) banks get no federal deposit insurance and must announce that in large font on all websites, transactions with customers, and on their doors.

    2. Universal banks cannot be bailed out by the US government, Fed, or banks that have federal deposit insurance. They must notify their customers of this in each transaction.

    3. Universal banks cannot be members of the Fed or use its services.

    4. Universal banks would have to give priority to small depositors (less than $250,000), then larger depositors, than bondholders, then shareholders. All shareholders would be wiped out before any creditors took a haircut.

    5. All pay of executives in a universal bank would be clawed back for four years if the universal bank went into bankruptcy. To assure the clawback, all executive pay would be held in trust for four years.

    6. Commercial (deposit-taking) banks with more than 1% of nationwide deposits pay a risk premium surcharge to FDIC based on their total deposits. For example, a bank that had ten percent of all US deposits could have to pay ten times as much FDIC premium per dollar of deposits as a bank with one percent of nationwide deposits with the same risk profile.

    7. The Post Office should be allowed to accept demand deposits (checking/ATM accounts) and savings for accounts up to $250,000. It would invest only in special treasuries.

    Americans can make our country better.

    by freelunch on Thu Mar 28, 2013 at 07:50:13 PM PDT

    [ Parent ]

    •  Nobody would (1+ / 0-)
      Recommended by:

      want to bank with a bank that had no insurance - that's the whole point of insurance.

      And restricting the use of the Fed makes no sense.  The Fed provides liquidity thru out the system.

      However, something obviously needs to be done about poorly managed banks' burden on us.

      The banks have a stranglehold on the political process. Mike Whitney

      by dfarrah on Fri Mar 29, 2013 at 08:24:03 AM PDT

      [ Parent ]

      •  The point of the uninsured bank (3+ / 0-)
        Recommended by:
        ericlewis0, Mannie, walkshills

        is that it is not a place for your checking or savings deposits. It is an investment institution. A place where you invest your money to take risks on substantial returns. The risk is yours. The reward is yours. The government does not insure your risk. You take that on yourself. It is for the big boys who can afford such risks and it segregates their risk from our savings and bill paying.

        "Do what you can with what you have where you are." - Teddy Roosevelt

        by Andrew C White on Fri Mar 29, 2013 at 01:13:16 PM PDT

        [ Parent ]

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