Sanders offers few details on how he would break up banks

AP News
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Posted: Apr 05, 2016 7:59 PM
Sanders offers few details on how he would break up banks

DES MOINES, Iowa (AP) — Bernie Sanders offered limited details on how he would break up big financial institutions during a recent interview with the New York Daily News.

In an interview with the newspaper's editorial board, published Monday, the Vermont senator was pressed on how he would carry out his campaign pledge. Sanders said some banks are too big and could be broken up either by "having legislation passed, or giving the authority to the secretary of treasury to determine, under Dodd-Frank, that these banks are a danger to the economy over the problem of too-big-to-fail."

But Sanders did not elaborate on exactly how this would work. When asked how breaking up banks would affect jobs and assets at large financial institutions like J.P. Morgan Chase or Citibank, Sanders said it "is their decision as to what they want to do and how they want to reconfigure themselves. That's not my decision."

In the wide-ranging interview, Sanders was asked about a wrongful death lawsuit against a rifle maker over the Sandy Hook Elementary School massacre. Sanders said gun dealers should not be sued for selling a "legal product" that was misused. But he did say people should be able to sue dealers and manufacturers who sell when they know "guns are going to the hands of wrong people."

Sanders also said he didn't know if President Obama's drone policy was the right one. And he "hadn't thought a whole lot" about where he would imprison a captured Islamic State commander.

On the banking questions, Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities in Washington, said Sanders "certainly muddled some of the details. But the general thrust of his argument came through clearly."

Still, Bernstein said that "for a candidate who feels so strongly about taking this action to break up the big banks, he should talk with greater specificity as to how he'd go about it."

Sanders, who has made banking reform a central issue of his campaign, argued that some financial institutions hold too much power.

"All I am saying is that I do not want to see this country be in a position where it was in 2008, where we have to bail them out," he said.

A president doesn't have legal authority to unilaterally break up banks. A group of regulators would have to carry out those plans, and a president is empowered to appoint the regulators. But they have staggered terms, designed to reinforce their independence from the White House.

Since the 2010 financial overhaul law, known as Dodd-Frank, was enacted, regulators have set in place a raft of rules for banks and other financial firms intended to end the "too big to fail" label.

Sanders spokesman Michael Briggs said via email Tuesday that a Sanders administration would establish a "too big to fail" list of financial institutions and would work with the Federal Reserve and financial regulators to break up the institutions using the authority under Dodd-Frank.

Briggs also said Sanders would seek to re-instate the Depression-era Glass-Steagall Act, which effectively limited the size of financial companies by prohibiting commercial banks from engaging in investment banking activities.