The Senate voted against breaking up the major Wall Street banks tonight — by a 61–33 vote. The amendment, touted as a way to end the notion of “Too Big to Fail,” would have required the six largest banks to be scaled down in size and capped so that their individual failures wouldn’t bring down the entire system. No bank would have been able to have more than 10 percent of the total amount of insured deposits — and there would have been “a limit placed on liabilities of a single bank to two percent of GDP.” Three Republicans — Alabama’s Richard Shelby, Oklahoma’s Tom Coburn, and Nevada’s John Ensign — voted with 30 Democrats in support of the provision.
“This is certainly a defeat for those who are concerned about the dangers of financial concentration in this country,” Delaware Democratic Sen. Ted Kaufman, one of the co-sponsors of the bill, said after the vote. “Some causes are worth fighting for, and for me, the concern about the risks ‘too big to fail’ banks pose to the American economy and people is deep and profound given the economic tragedy millions of American have endured.”
Though Obama’s administration hadn’t publicly opposed the amendment, the president’s top economic advisers hadn’t supported this method of breaking up the megabanks.