This post has been corrected.
In one of his many references to the country's financial schism during Thursday night's Democratic debate, Bernie Sanders argued for splitting up "too big to fail" banks because, since almost failing, they'd only gotten bigger.
"When you have three out of the four largest financial institutions in this country bigger today than they were when we bailed them out because they were too big to fail," Sanders said, "when you have six financial institutions having assets equivalent to 58 percent of the GDP of America, while issuing two-thirds of the credit cards and a third of the mortgages -- look, I think if Teddy Roosevelt were alive today, that great trust-buster would have said 'break them up.'"
The measure used to evaluate the size of a bank is the assets it holds. During the financial crisis, the government disbursed $618 billion in funds to bailout organizations at risk of collapse, most of which were banks. According to data compiled by ProPublica, some 758 banks received bailout money totaling $236 billion. That would have been enough money to cover the annual incomes of 4.5 million American households in 2008.
The four banks receiving the most funds were Bank of America, Citigroup, JPMorgan Chase and Wells Fargo (which absorbed Wachovia during the crisis). Here's how three of those four banks changed since 2006, using data on insured assets from the FDIC.
All three have gotten bigger -- even outpacing the size of the banks from 2006, once adjusted for inflation. Of the 15 banks that received the most bailout money, 11 are now bigger than they were before the recession, even after adjusting for inflation. Two are bigger than they were prior to the recession if you don't adjust for inflation, and one, Alabama-based Regions Financial Corporation, is smaller.
Correction: The above chart originally included Citibank, a subset of Citigroup, the larger institution. Citibank's insured assets grew between 2006 and 2015, but Citigroup, the umbrella, contracted from $1.9 trillion to $1.7 trillion.
If you look at all of the commercial banks in the United States collectively, the assets held in Dec. 2015 was 59 percent larger than the assets they held in Dec. 2006, before the market collapse. The recession was a blip on a steep upward climb.
Sanders is right then that banks are much bigger. The question that follows, though, is whether or not they are that much more at risk. One change made after the recession -- along with other new regulations -- was to mandate that banks hold more capital. That means that the banks can't extend themselves nearly as far without a safety net.
Is that enough to prevent a crisis? Bernie Sanders -- and Teddy Roosevelt, per Sanders -- are skeptical.