fb tracking

Wait, wait, don’t tell me. Take our TOO BIG TO FAIL Quiz!

"Bart Naylor" "Financial policy"
Bart Naylor, financial policy analyst, Public Citizen

By Bartlett Naylor and Carl Wilhjelm

One of the most pressing issues of our day is the financial crisis that has put 9.1% of Americans out of work as of this month. Underlying that issue is the problem of our Too Big to Fail banks.

On June 14, conservative lawmakers spotlighted this problem at a hearing of the House Financial Services subcommittee on financial institutions. Public Citizen cherishes the rare times when we can celebrate conservatives, so we’ll restate: Conservatives held a useful hearing. What’s more, and we cherish this even more dearly, conservatives expressed an important sentiment about the problem and what should be done, end Too Big to Fail.

In a nutshell, Too Big to fail means some banks have gotten so big, so “systemically important” that the government must bail them out when they falter to avoid an even greater collapse. The bankers know this. In fact, they bank on it. They have sought and continue to seek to become so large that the government and the taxpayer essentially act as an ultimate insurance policy. They make reckless bets to enrich themselves, knowing there’s no downside to them.

Because this problem looms so large we hereby announce a contest!


Match the observation of quotation with the correct answer. The questions appear first, marked with letters, such as A, B, C. The answers follow, marked with numbers, as in 1, 2, 3. Write out the letters, with the corresponding number after it, such as A-3; B-9; C-4, etc.  Write your answers in the “comment” section below the blog.  This is an open-book test. Use the Internet.


The first set of 100% correct answers wins the DVD The Story of Citizens United AND one of these progressive films: The Corporation, An Unreasonable Man, The Story of Stuff, Battle In Seattle, Outfoxed, Who Killed the Electric Car? or Super Size Me.

(Public Citizen workers may not compete. Violators using pseudonyms will be forced to drink a can of my favorite beer—Natural Light— which I am apparently the only person over 22 who savors.)

Match it up here . . .

A. Employer of the husband of Chairman Shelly Moore Capito, who called the hearing, formally titled “Does the Dodd-Frank Act End Too Big to Fail?”

B. Who said: “Unless and until institutions like Citigroup are either broken up, so that they are no longer a threat to the financial system, or a structure is put in place to assure that they will be left to suffer the full consequences of their own folly, the prospect of more bailouts will potentially fuel more bad behavior, with potentially disastrous results.”

C. Who said: “Today, the top ten financial firms in size account for 64 percent of total assets, up from 25 percent in 1990. Because of their implicit government backstop, many of these firms benefit from lower borrowing costs, which according to various studies range from 78 to 100 basis points.  By definition this implicit subsidy has and will continue to erode market discipline, thus further weakening our financial system. The truth of the matter is – in times of crises – regulators have always and will always err on the side of more intervention and more bailouts. As a result, Too Big to Fail not only lives on, it’s further compounded. I hope we take steps to correct this failure in the coming months and reinstate market discipline.”

D. Largest career contributor to Shelly Moore Capito, according to the Corporate Crime Reporter.

E. Number of days, as of June 16, that Capito has not disclosed her husband’s employer in her website biography (long form)

F. Who said “We continue to encourage our institutions to get bigger and bigger and bigger and with that size comes more risk. I think that were winding up getting into a position where we have more and more concentration and as a result whenever one of those institutions becomes systemically interconnected with everybody else and gets in big trouble then were talking about how do we wind it down. What happens when the whole group of all of these half a dozen or dozen institutions now are all in trouble how are we going to wind them all down? This is the situation we were in in  2008. This bill does not solve this problem. “

G. Who asked the question “I’m curious if either of you believe the notion, just the notion of Too Big to Fail, has really been driven out of the market place?” to which FDIC General Counsel Michael Krimminger responded “Well not yet… It’s not based on any statutory clause, but what could happen under — a future congress — in a crisis.”

H. Who said: “Orderly liquidation authority effectively eliminates the implicit safety net of Too Big to Fail that has insulated these institutions from the normal discipline of the marketplace”

I. How many senators signed the letter to President Obama threatening to hold up all nominees including Elizabeth Warren for the Consumer Financial Protection Bureau until the bureau is emasculated?

J. During this hearing, Corporate Crime Reporter put out an interview with Neil Barofsky who was Special Inspector General for the Troubled Asset Relief Plan until February. Barofosky said that a high-level administration official lobbied against limiting the size of major banks during the debate on Dodd-Frank. Who did Barofsky name?


1. Treasury Secretary Timothy Geithner.

2. 44

3. Michael Krimminger, General Counsel, FDIC, because we don’t want the top lawyer there explicating that TBTF hasn’t been solved, since this implicit fact is bad enough. (Just as we don’t tell our four year old daughter that she is going to die some day; it’s a harsh reality better left for a more mature age.)

4. Bill Huizenga, R-MI

5. Luetkemeyer R-MO

6. 46

7. Citicorp

8. Ed Royce, Republican from the 10th district of California, and known as a proponent of banking deregulation.

9. Christine Romero, acting Special Inspector General for the Troubled Asset Relief Program, the largest government appropriation in the history of the planet.

10. Wells Fargo Advisors

Sample answer format in the comment section below:  A-2; B-4; C-5 etc. (not the correct answers, btw).