Too Big to Fail: Dodd Bill Doesn't Solve the Problem

By Stephen Gandel, Time - April 9, 2010

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.

"Too big to fail is opposed by the right and the left, though not apparently by the people drafting legislation," says Simon Johnson, who is an MIT professor and the author of recently published book on the issue, 13 Bankers: The Wall Street Takeover and The next Financial Meltdown. "The current financial reform bills are effectively a wash on the issue."


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