Newly minted Sen. Elizabeth Warren on Tuesday showed why big banks are not her biggest fans, grilling Federal Reserve Chairman Ben Bernanke about the risks and fairness of having banks that are “too big to fail.”
Warren (D-Mass.) questioned Bernanke during his latest semiannual appearance before the Senate Banking Committee to discuss the economy and monetary policy. Warren pressed the Fed chairman about whether the government would bail out the largest banks again, as it did during the financial crisis.
“We’ve now understood this problem for nearly five years,” she said. “So when are we gonna get rid of ‘too big to fail?’”
Warren also asked whether big banks should repay taxpayers for the billions of dollars they save in borrowing costs because of the credit market’s belief that they won’t be allowed to fail, repeatedly citing a recent Bloomberg View study estimating that the biggest banks essentially get a government subsidy of $83 billion a year, nearly matching their annual profits.