The U.S. financial system is just asking for trouble as long as federal regulators allow the nation’s largest banks to grow and grow, a Democratic senator warned in a speech this week.

Senator Elizabeth Warren (D-Massachusetts), rumored to be mulling a White House bid in 2016, said Washington’s unwillingness to reign in banks “too big to fail” has allowed them to expand significantly since the 2008 financial crisis.

Speaking at an event organized by the progressive think tank the Roosevelt Institute and Americans for Financial Reform, Warren claimed the four largest banks—JPMorgan Chase, Bank of America, Citigroup and Wells Fargo—today are 30% larger than five years ago.

“Who would have thought…after we witnessed firsthand the dangers of an overly concentrated financial system, that the Too Big to Fail problem would only have gotten worse?” Warren asked.

She also pointed out that the five largest banks “now hold more than half of the total banking assets in the country. One study earlier this year showed that the Too Big to Fail status is giving the 10 biggest U.S. banks an annual taxpayer subsidy of $83 billion.”

To rectify this danger, Warren is cosponsoring bipartisan legislation that would dismantle too-big-to-fail institutions.

The bill, called the 21st Century Glass-Steagall Act (pdf), would reinstate many of the protections found in the original Glass-Steagall legislation adopted during the Great Depression, and later revoked during the Clinton administration.

A key provision would separate commercial banking from investment banking to eliminate the risk of financial institutions using the savings of millions of Americans betting on risky ventures, like swaps.

The bill is coauthored by Senators John McCain (R-Arizona), Maria Cantwell (D-Washington), and Angus King (I-Maine).

Warren told her audience: “We should not accept a financial system that allows the biggest banks to emerge from a crisis in record-setting shape while working Americans continue to struggle. And we should not accept a regulatory system that is so besieged by lobbyists for the big banks that it takes years to deliver rules and then the rules that are delivered are often watered-down and ineffective.”

-Noel Brinkerhoff

To Learn More:

Sen. Warren Warns 'Too Big to Fail' Banks Now Even Bigger (by Lauren McCauley, Common Dreams)

Elizabeth Warren Challenges Obama to Break Up 'Too-Big-to-Fail' Wall St Banks (by Dan Roberts, The Guardian)

5 Biggest Banks Gain another Victory in Control of $700 Trillion Derivatives Market (by Noel Brinkerhoff, AllGov)           

Holder Claims Big Banks are Too Big to Jail (by Noel Brinkerhoff, AllGov)          

Big 6 Banks Worth 64% of Nation’s GDP…up from 17% in 1995 (by Noel Brinkerhoff and David Wallechinsky, AllGov)