Financial Stability News

News about financial stability, central banking and theory of money

Too Big to Fail Not Fixed, Despite Dodd-Frank

Simon Johnson has an interesting Bloomberg article where he argues that too-big-to-fail is not fixed by Dodd-Frank. In his view, it is highly unlikely that Treasury would have used the new liquidation powers on the big banks – if they had been available in 2008. The only thing that will work is to break up (or down, depending on how you view this) the large mega banks. Quote: The financial system hasn’t become safer since September 2008. We are not in a strong position to weather the financial storms that now appear on the horizon.


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