Jun
06
Why Regulators Are Needed to Handle Failed Banks
ByOne of the major reforms to avoid the recurrence of the severity of the financial crisis was a set of mechanisms by which the regulators could wind down failed banks or restructure them if they were still viable.
The House of Representatives is set to vote to repeal this measure and replace it with a bankruptcy that only the bankers themselves could decide to enter. These are dangerous actions that can risk turning a tumultuous bank failure into a deep and full financial crisis, like that of the 2008-9 financial panic. Bankruptcy alone cannot handle a financial crisis emanating from collapsed banks…
Why Regulators Are Needed to Handle Failed Banks
