One month after facing questioning from Sen. Elizabeth Warren (D-Mass.) over whether America’s “too big to fail” problem has been solved, Federal Reserve Chairman Ben Bernanke said on Wednesday that he agrees TBTF remains a problem.
“Too big to fail is not solved and gone,” Bernanke said, according to The Huffington Post. “I agree with Elizabeth Warren 100 percent that it’s a real problem.”
During a conversation with Warren last month, Bernanke said regulators did not eliminate shareholders during the financial crisis because “[they] didn’t have the tools,” adding that the contentious Dodd-Frank Act has provided legislators with the authority to wind down failing institutions.
Additionally, Bernanke said that the activities of big banks contributed to the recent economic collapse.
“Too Big to Fail was a major source of the crisis, and we will not have successfully responded to the crisis if we do not address that successfully,” Bernanke said, The Huffington Post reports.
Bernanke pointed to Dodd-Frank rules that require America’s largest financial institutions to hold additional capital or pay higher fees than smaller institutions.
“If we don’t achieve the goal of [solving big to fail with Dodd-Frank], we will have to take additional steps,” Bernanke said, according to The Huffington Post. “It is important.”