FT 3-01: Fremont Bank Downsizing Act of 2017

[Wikipedia delenda est]

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Order! I call Mr. Wallace.

[Wikipedia delenda est]

This bill seeks to break up, or downsize, the big banks in Fremont. The failure of these banks would have a catastrophic economic effect; thus they are called "too big to fail". A common cause of banks being in a position of failure is if they engage in risky behavior, such as subprime lending. A common solution for preventing these banks from failing is a taxpayer funded government bailout. But why should the government and taxpayers reward banks for acting riskily and greedily? They shouldn't. Bailing out the banks would cause a moral hazard. Instead, the big banks should be broken up so that they are not "too big to fail", meaning that a taxpayer funded bailout would not be necessary.

This bill defines "too big to fail" banks as banks that hold at least $100 billion in assets. The bill gives them 1 year to downsize into smaller institutions so that each smaller institution holds less than $100 billion dollars in assets. If banks don't meet the downsizing requirements, then they have to pay a penalty of 1 cent for every dollar in assets they hold in excess of $100 billion.

Similar to how the recently passed 21st Century Glass Stegall Act was based off of a proposal by Elizabeth Warren, this proposal is roughly based off of a proposal by another progressive senator, the "Too Big to Fail, Too Big to Exist Act" by Bernie Sanders. While the 21st Century Glass Stegall Act was a great step forward at the federal level in Atlasia, I believe that Fremont can go even further. Fremont has constantly proven itself to be the most progressive, ahead of its time, and forward-thinking region in Atlasia. The Bessell-Truman Transgender Rights Act, passed in Fremont, was quickly followed by the Bessell-NeverAgain Transgender Rights Act being passed in the South. I believe that if Fremont were to pass the Fremont Bank Downsizing Act, a similar effect could occur, in which other regions would adopt similar progressive legislation after following the lead of Fremont.

[anthonyjg]

This seems like a great idea and I am on board in theory. The only question I have is how was it decided that at least $100 billion in assets made a bank "too big to fail?"

[Wikipedia delenda est]

This seems like a great idea and I am on board in theory. The only question I have is how was it decided that at least $100 billion in assets made a bank "too big to fail?"

A study on "too big to fail" banks conducted by the Center for Economic Policy and Research defined said banks as banks that held at least $100 billion in assets. Also, when the Financial Stability Board was considering labeling some banks as "too big to fail", the criteria for "too big to fail" was holding at least $100 billion in assets.

[anthonyjg]

This seems like a great idea and I am on board in theory. The only question I have is how was it decided that at least $100 billion in assets made a bank "too big to fail?"

A study on "too big to fail" banks conducted by the Center for Economic Policy and Research defined said banks as banks that held at least $100 billion in assets. Also, when the Financial Stability Board was considering labeling some banks as "too big to fail", the criteria for "too big to fail" was holding at least $100 billion in assets.

Excellent, thank you! With that, I am fully behind this bill.

[Wikipedia delenda est]

Because debate on this bill has stalled for longer than 36 hours and this bill was introduced more than 72 hours ago, I move for a final vote on this bill. Members shall have 24 hours to object to this motion.

[Unconditional Surrender Truman]

I do apologize for my absence over the last few days. It's been a rather hectic time in the world beyond the forum, and the attention I've been able to give to this bill was not in my view sufficient to pay the consideration it deserves.

As a matter of principle, I consider the existence of any financial institution worthy of the title "too big to fail" a liability to the general prosperity of our republic. Certainly this view was vindicated by the advent of, and subsequent bungled response to, the financial crisis of 2007-2008. On these grounds, I support the proposal brought by the honorable Speaker.

However, I am concerned that this house may not be the most appropriate venue for the introduction of such sweeping reforms to our financial system. The House of Commons, after all, is elected by the people of Fremont to represent their local interests; it is accountable, practically and constitutionally, to only an approximate third of the national population. Yet the practical effects of this bill would be to require any bank operative within the Commonwealth of Fremont - including presumably, national financial institutions established in all three regions - to either comply with our mandate, or else to cease operations here entirely. Thus, in practice, a third of our republic would presume to speak for the entirety of our national population. Much as I consider financial reform a necessity, that is not a precedent that I wish to set.

Now, it its quite possibly that I have greatly misinterpreted the intent or effects of this legislation, in which case I would happily reconsider my position; but as it stands, I would have a difficult time voting for this bill. I will object to the motion for a final vote so that the sponsor and our colleagues may have chance to address this matter before the question is brought to the floor.

[Wikipedia delenda est]

This bill shall affect banks that operate solely in Fremont, not national banks that operate in Fremont and throughout the rest of Atlasia. I understand and recognize that the federal government of Atlasia, not the region of Fremont, has the right to regulate interstate commerce. For clarification, I propose the following amendment:

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Members shall have 24 hours to object to this amendment.

[Unconditional Surrender Truman]

My thanks to the Speaker; the amendment is most appreciated.

[Wikipedia delenda est]

The amendment proposed by Mr. Wallace has been adopted.

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Seeing no further debate, I move for a final vote on this bill. Members shall have 24 hours to object to this motion.

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The motion is agreed to. The question is now that the bill be passed. Members shall vote Aye, Nay, or Abstain. Voting shall last for 72 hours or until all members have voted.
Division!

[Wikipedia delenda est]

Aye

[Unconditional Surrender Truman]

Aye

[anthonyjg]

aye

[Unconditional Surrender Truman]

With three votes in favor and none opposed, this legislation has been ADOPTED.

[Unconditional Surrender Truman]

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