For Immediate Release
Michael Briggs (202) 228-6492
CBO: Bank Deregulation Bill Would Lead to More Bailouts
WASHINGTON - The Congressional Budget Office estimated Monday that the Economic Growth, Regulatory Relief, and Consumer Protection Act – expected to be voted on by the Senate this week – would "increase the likelihood that a large financial firm with assets of between $100 billion and $250 billion would fail."
The increased likelihood of large financial institutions requiring taxpayer bailouts is a result of changes to how these banks are designated, which "would result in fewer assets being subject to enhanced prudential regulation," according to CBO.
"This banking bill is a disaster. The Wall Street crash of 2008 showed the American people how fraudulent many of these large banks are. The last thing we should be doing is deregulating them. As the Congressional Budget Office reported today, the bill that the Senate will be considering this week will 'increase the likelihood that a large financial firm with assets of between $100 billion and $250 billion would fail.' Why would any member of Congress vote to move us closer to another taxpayer bailout of large financial institutions? This bill must be defeated," said Sanders, the ranking member of the Budget Committee.
A 1 percent decrease in the capital-to-assets ratio for a bank can increase the probability of failure by up to 60 percent, according to research CBO relied on when producing their cost estimate.
If financial institutions failed at a higher rate than estimated, CBO predicted "the costs to the Deposit Insurance Fund (DIF) or the Orderly Liquidation Fund (OLF) would be very large."
To read CBO's score of the bill, click here.
FRIENDS: Help Us Fight
Independent journalism has become the last firewall against government and corporate lies. Yet, with frightening regularity, independent media sources are losing funding, closing down or being blacked out by Google and Facebook. Never before has independent media been more endangered. If you believe in Common Dreams, if you believe in people-powered independent media, please support us now and help us fight—with truths—against the lies that would smother our democracy. Please help keep Common Dreams alive and growing. Thank you. -- Craig Brown, Co-founder
United States Senator for Vermont