Big Banks Are Even Bigger Five Years After The Financial Crisis

The four biggest banks in the U.S., JP Morgan, Bank of America, Citigroup, and Wells Fargo, hold $7.8 trillion in assets altogether, up from $6.4 trillion when the crisis hit in 2008, according to an analysis by the Huffington Post. That means their combined assets today amount to 47 percent of gross domestic product (GDP), up from 43 percent five years ago. The six biggest, which includes Goldman Sachs and Morgan Stanley, have $9.6 trillion in assets, which comes to 58 percent of GDP.

After the bankruptcy of Lehman Brothers, the biggest banks received taxpayer bailouts out of the fear that they were “too big to fail” and would bring down the entire financial system. But those banks are now larger, despite the fact that lawmakers have been trying to end the problem of too big to fail firms.

There’s other evidence that these banks remain dangerously large. While the Dodd-Frank financial reform bill requires banks to prove that they can be wound down in the case of a crisis without hurting the rest of the system, they have so far failed to convince regulators that this is in fact the case. Federal Reserve officials, including Chair Ben Bernanke, have acknowledged that there is still a ways to go to end the problem of too big to fail.

Lawmakers have been pushing for tougher action to break up the big banks. Sen. Elizabeth Warren (D-MA) has questioned whether these banks are “too big for trial,” while Sens. Chuck Grassley (R-IA), Jeff Merkley (D-OR), Sherrod Brown (D-OH) have questioned whether they are “too big to jail.” Brown and Sen. David Vitter (R-LA) introduced legislation in April that would require banks to hold more capital — money on hand that helps blunt the risk of other bets — that would force them to either raise money or reduce their size.