to chair the Senate Banking Committee come 2015.
It's certainly true that Brown would be tougher on big banks than the financial industry is used to. And the one-two punch of Brown and freshman Sen. Elizabeth Warren of Massachusetts could turn the committee into far more of an activist watchdog than it's been in decades. Brown already has made it clear that banks "too big too fail" are banks too big, period:
“It’s not just that they are too big to fail,” the senator says. “They really are too big to understand and too big to manage. They are certainly too big to regulate. And they have only gotten bigger since the financial crisis.” The concentration of banking power in a few big-name firms was already dangerous. Now it is even more dangerous.Brown and Republican Sen. David Vitter of Louisiana have worked together on requiring higher capital requirements for banks, and the Senate just passed the Brown-Vitter budget amendment that ends government hand-outs to banks with assets of more than $500 billion. Please continue reading below the fold about Brown's chances for the Senate Banking Committee chairmanship.
Senator Brown explains, “The four largest behemoths, now ranging from $1.4 trillion to $2.3 trillion in assets, are the result of thirty-seven banks merging thirty-three times. In 1995, the six biggest US banks had assets equal to 18 percent of GDP. Today, they are about 63 percent of GDP.”
No wonder then that Brown is not on the top of the list of favorites for the banking post, although some think his negative reputation within the financial industry is distorted:
"It would be a monumental shift in terms of both tone and substance from the [Chris] Dodd and Johnson chairmanships,” Isaac Boltansky, an analyst at Compass Point Research & Trading, told Politico. “I think everything from too-big-to-fail banks all the way down to issues impacting the unbanked and underbanked would suddenly see a new energy behind them." [...]Those assessments aside, there are a few obstacles to leap over before Brown could even get the job. With Johnson gone, he would be fourth in line of seniority.
“I think that unfortunately too many people try and promote … kind of a caricature of Sherrod Brown as a fire-breathing liberal,” said Dennis Kelleher, president and CEO of Better Markets, a group that advocates for tight oversight of Wall Street. “But I think anybody who’s worked with him knows and understands that he’s a pretty thoughtful, open guy.”
Ahead of him is Jack Reed of Rhode Island. But since Armed Services Committee Chairman Carl Levin of Michigan is also retiring, that's where Reed would presumably prefer to land. Next down the list is Chuck Schumer of New York. He is seen as the most likely candidate for the post, especially given how much of the financial industry is based in his state. If Majority Leader Harry Reid were to retire from that post, Schumer might go for it, but there's no reason to believe Reid is pondering any such move.
If Schumer didn’t take the banking chairmanship, the third in line is Robert Menendez of New Jersey. But he is already chairman of the Foreign Relations Committee, a post he would be unlikely to give up.
But before any of this can happen, the Democrats have to hang onto the Senate. And 2014 will be a tough year with 21 seats held by Democrats in the running and only 14 held by Republicans. Five Democratic retirements have already been announced. Besides Johnson and Levin, Frank Lautenberg of New Jersey, Tom Harkin of Iowa and Jay Rockefeller of West Virginia are all out.
If the Democrats don't win, the next chairman of the Senate Banking Committee would likely be ranking member Mike Crapo, the Republican from Idaho.