Two additional requirements imposed by the Bailout Prevention Act on the Fed's broad-based lending programs are, according to Bernanke: first, requiring a firm's solvency to be certified by the Fed and the supervisors of the firm before receiving any loans; and second, requiring emergency loan interest rates to be at least 5 percentage points higher than the Treasury Department's rate.
Read More »Senators Introduce Bill Limiting Fed’s Lending Authority, Ending ‘Too Big to Fail’
"If big financial institutions know they can get cheap cash from the Fed in a crisis, they have less incentive to manage their risks carefully - which further increases the chance of another financial crisis," Warren said. "This bill would make our financial system safer and help level the playing field between the megabanks and their smaller competitors."
Read More »DOJ Moves to Dismiss MetLife’s Suit Over ‘Too Big to Fail’ Designation
"Far from presenting systemic risk to the U.S. economy, MetLife is a source of financial stability," a spokesman from MetLife said in an email to DS News. "We strongly disagree with the arguments laid out by the government in its brief and look forward to responding in court next month."
Read More »Republican Lawmakers Seek to Halt Government Bank Rescues
Just as they promised when they gained a majority in both the House and Senate in the November elections, Republicans are in talks to chip away at the Dodd-Frank Wall Street Reform and Consumer Protection Act, according to a report from Reuters.
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