April 8th, 2010
04:22 PM ET

'Too Big To Fail': Still a Problem Too Big to Solve?

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2010/images/03/23/art.bull.wallstreet.file.gi.jpg caption="A proposed financial reform bill could create a team of regulators with the authority to shut down troubled institutions." width=300 height=169]

Stephen Gandel

Too big to fail, it appears, may be too big to solve.

Connecticut Senator Christopher Dodd's recently proposed financial reform bill creates a team of regulators with the authority to shut down troubled institutions. It calls for capital and liquidity requirements. It requires banks to fund a $50 billion bailout fund, as well as draft so-called living wills — detailed plans drawn up in advance of how the firms should be shut down if they run into trouble.

Yet, policy experts and economists from both ends of the political spectrum say the bill does little to end the problem of banks becoming so big that the government is forced to bail them out when they stumble. Some say the proposed financial reform may even make the problem worse.


Filed under: Citigroup • Finance • Wall St.
soundoff (One Response)
  1. Ann-Virginia

    Maybe we should have let a few of these big banks fail.I don't think it would have made things much worse & they need to be taught a painful lesson.They screw over Americans & do't care,so maybe turn about is fair play.I say let 'em fail.

    April 8, 2010 at 4:48 pm |

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