Now THIS is legislation to get behind. From Senator Bernie Sanders, Independent from VT.

Update: Reader macstibs posts this link to a petition supporting Sanders.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Too Big to Fail, Too Big to Exist Act’’.

SEC. 2. REPORT TO CONGRESS ON INSTITUTIONS THAT ARE TOO BIG TO FAIL.

Notwithstanding any other provision of law, not later than 90 days after the date of enactment of this Act, the Secretary of the Treasury shall submit to Congress a list of all commercial banks, investment banks, hedge funds, and insurance companies that the Secretary believes are too big to fail (in this Act referred to as the ‘‘Too Big to Fail List’’).

SEC. 3. BREAKING-UP TOO BIG TO FAIL INSTITUTIONS.
Notwithstanding any other provision of law, beginning 1 year after the date of enactment of this Act, the Secretary of the Treasury shall break up entities included on the Too Big To Fail List, so that their failure would no longer cause a catastrophic effect on the United States or global economy without a taxpayer bailout.

SEC. 4. DEFINITION.
For purposes of this Act, the term ‘‘Too Big to Fail’’ means any entity that has grown so large that its failure would have a catastrophic effect on the stability of either the financial system or the United States economy without substantial Government assistance.

Points for simplicity, though this doesn’t deal with the problem of complexity in financial markets. Still, it’s a good start.

Rob Cox of BreakingViews notes the obvious irony here: Socialist Senator proposes most capitalist bill.

I doubt Kanjorksi’s amendment, when it surfaces, will be quite this blunt. My guess is it will lean more heavily on regulator discretion.