The FSOC has the authority to designate institutions as "systemically important," which opponents say leaves the door open for taxpayer-funded bailouts.
Read More »‘Too Big to Fail’ is in Fed’s Crosshairs
“Emergency lending is a critical tool that can be used in times of crisis to help mitigate extraordinary pressures in financial markets that would otherwise have severe adverse consequences for households, businesses, and the U.S. economy,” Fed Chairman Janet Yellen said.
Read More »Chase CEO: ‘Big, Dumb Banks’ Should Be Allowed to Fail
Should banks actually be allowed to fail? Well, the “big, dumb” ones should, according to JPMorgan Chase chairman and CEO Jamie Dimon, who on Wednesday blasted the institutionalized belief that mega-dollar bailouts for badly run banks is good for the economy.
Read More »Did Dodd-Frank Achieve Its Stated Goal of Ending ‘Too Big to Fail’?
The Dodd-Frank Act still allows the Fed some of the same emergency lending programs used in the aftermath of the 2008 crisis despite the legislation's stated purpose of ending such bailouts, according to a study by Norbert J. Michel, Research Fellow in Financial Regulations, the Institute for Economic Freedom and Opportunity at the Heritage Foundation.
Read More »Some Lawmakers Believe ‘Too Big to Fail’ Is Still Alive Seven Years After the Crisis
In July 2015, the House Financial Services Financial Institutions and Consumer Credit Subcommittee held a hearing to discuss the criteria for designating a company as a SIFI, criticizing the $50 billion asset threshold required by Dodd-Frank.
Read More »Senate Subcommittee Examines Strategies for Ending ‘Too Big to Fail’
Taylor noted there are two current bills in Congress—one in the House (the Financial Institution Bankruptcy Act of 2015) and one in the Senate (the Taxpayer Protection and Responsible Resolution Act), which he called "essential" for ending government bailouts.
Read More »Lawmakers Debate ‘Too Big to Fail’ and Criteria for ‘Systemically Important’ Tag
Some members of the Subcommittee contended at the hearing that Dodd-Frank is codifying "too big to fail" by continuing to designate firms (both banks and non-banks) as SIFIs, therefore guaranteeing those firms a federal backstop should a financial crisis occur.
Read More »House Subcommittee to Hold Hearing On Banks Designated as ‘Systemically Important’
"Since the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, there has been much discussion by members of Congress, regulators, and academic experts related to the designation and regulatory standards for bank holding company SIFIs," the Committee wrote in a memorandum about Wednesday's hearing.
Read More »National Groups File Briefs Supporting MetLife’s Suit to Have ‘Too Big to Fail’ Tag Removed
The National Association of Insurance Commissioners (NAIC), the American Council of Life Insurers (ACLI), the Academic Experts in Financial Regulation (AEFR), and the U.S. Chamber of Commerce all filed briefs backing the New York-based global insurance provider's attempt to remove the SIFI tag.
Read More »Bipartisan Bill Introduced In Congress Aimed At Preventing Fed Bailouts
Garrett and Mike Capuano (D-Massachusetts) introduced H.R. 2625, also known as the Bailout Prevention Act (BPA) of 2015 in response to the Fed's perceived failure to make any meaningful changes with regards to implementing certain provisions of Dodd-Frank that would limit the Fed's broad powers.
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