The following is from an editorial in The Philadelphia Inquirer:
The nation's biggest banks are waging an outrageous fight against a bipartisan Senate bill seeking to protect taxpayers from bailing them out.
Renewed interest in curtailing reckless financial practices was sparked by Attorney General Eric Holder's admission earlier this year that he is afraid to prosecute the banks that brought about the worst downturn since the Great Depression. Holder said going after the banks risks harming the economy again.
In 2008, taxpayers bailed out the banks because they were thought to be "too big to fail." Back then, the government promised taxpayers that they wouldn't end up on the hook again. But they could.
If the country's giant banks were to face failure today, funds from investors and depositors might not be enough to keep them afloat. No doubt there would be cries for another bailout.
The banks are still too big to fail — that is, their failure could seriously undermine the economy.
So it makes sense that Sens. Sherrod Brown, D-Ohio, and David Vitter, R-La., want to require the biggest banks to maintain much higher capital reserves than they do now. Think of it as telling a gambler to leave some money at home when he goes off to the casino. The legislation would ensure that banks are able to pay off any losses with their money.
The senators are in for a struggle with an industry that already exerts undue political influence. The banks are likely to argue that if the government pokes its nose into their business, the economy will suffer.
That sounds like a hostage situation, doesn't it? The big banks have pulled fistfuls of cash from the American taxpayer's wallet, and they are not welcome to do it again.