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U.S. Senate Bill Seeks To Cap Bank Size

A group of Senate Democrats, led by Senator Ted Kaufman, are seeking to place strict limits on the size of financial institutions, as part of legislation to reform the financial sector.

Senator Ted Kaufman

A group of Senate Democrats are seeking to place strict limits on the size of financial institutions, as part of legislation to reform the financial sector, The Wall Street Journal reports. The measure, which is being sponsored by Senator Ted Kaufman, would not allow a bank holding company to hold more than 10 percent of the nation’s total insured deposits.

The bill would also cap a firm’s non deposit liabilities to 2 percent of U.S. gross domestic product, while nonbanks would be capped at 3 percent of GDP. The measure would also place a 6 percent leverage limit for bank holding companies and certain nonbank financial institutions.

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