There’s been no shortage of criticism aimed at Wall Street during the 2016 election cycle, but it’s been laid on especially thick this week.
Democratic presidential candidate Bernie Sanders attacked Goldman Sachs earlier Wednesday. Later the same day, one of the most vocal opponents to Wall Street, Massachusetts Senator Elizabeth Warren, took to Twitter to call for banks to reform.
That’s because this week has served as a stark reminder of the fallout surrounding the 2008 recession. Goldman Sachs agreed to pay $5 million for its role in the financial crisis Monday, while five “too big to fail” mega-banks didn’t pass their “living will” test, according to U.S. Regulators Wednesday. The “test” is a plan submitted by each of the institutions annually which detail how t hey will wind down operations without public funds or bringing down the rest of the economy. The test was created following the financial crisis in the hopes of preventing a sequel to the Recession.
Elizabeth Warren unleashed a frenzy of tweets Wednesday, calling for Congress to “show some backbone” and pressure banks to break apart. She cautioned that citizens shouldn’t overlook the results of the test:
5 US banks are big enough that any one could crash the economy again if they failed & weren’t bailed out. It’s a very big deal. It’s scary.
— Elizabeth Warren (@SenWarren) April 13, 2016
Unless the banks promptly address regulators’ concerns, the gov must push these banks to get smaller & less complex.
— Elizabeth Warren (@SenWarren) April 13, 2016
Warren continued to note that Wall Street has poured millions into deregulation and to “deflect blame” from the 2008 financial crisis:
There would be no crisis without these giant banks that encouraged reckless mortgage lending & funded slimy subprime lenders.
— Elizabeth Warren (@SenWarren) April 13, 2016
The big banks spread risk throughout the system by misleading investors about the quality of mortgages in the securities they were offering.
— Elizabeth Warren (@SenWarren) April 13, 2016
Big bank execs got rich but when it all predictably blew up, the gov lavished their institutions with billions in bailouts.
— Elizabeth Warren (@SenWarren) April 13, 2016
She also gave an unmistakable shoutout to J.P. Morgan CEO, Jamie Dimon, with whom she has feuded with before:
No execs lost their jobs in exchange for taxpayer rescue. None went to jail. Some, like Jamie Dimon, are still running the same banks.
— Elizabeth Warren (@SenWarren) April 13, 2016
This is a giant warning sign of the central role big banks will play in the next crisis unless Congress & regulators show some backbone.
— Elizabeth Warren (@SenWarren) April 13, 2016
Today, our top regulators warned us about the danger of the biggest banks. We would be foolish to ignore their warnings.
— Elizabeth Warren (@SenWarren) April 13, 2016
At any rate, the fives banks who were slapped with a failing grade on Wednesday, a list that includes JPMorgan and Wells Fargo, will have until Oct. 1 to fix up their plans, or risk sanctions. At the most extreme, it could end with banks breaking up.