Too Big to Fail

Reasons Why Too Big to Fail Is Just Wrong.

The Obama Administration's Financial Regulatory Reform: A New Foundation does what ever it can to preserve "Too Big to Fail" institutions. The proposal calls "Too Big to Fail" financial conglomerates Tier 1 Financial Holding Company. This is from the White Paper: Financial Regulatory Reform:

Any financial firm whose combination of size, leverage, and interconnectedness could pose a threat to financial stability if it failed (Tier 1 FHC) should be subject to robust consolidated supervision and regulation, regardless of whether the firm owns an insured depository institution.

Translation: We are OK with financial institutions - Tier 1 FHC - that can cripple the entire global financial system such as Citigroup because we are going watch them more closely.

William Black’s Proposal for “Systemically Dangerous Institutions”

George Washington of Washington’s Blog, posted Black's recent proposal on Naked Capitalism. Black is Associate Professor of Economics and Law at the University of Missouri – Kansas City, and the former head S&L regulator, and author of the book, The Best Way to Rob a Bank is to Own One. Black' has been a lonely voice in the wilderness warning that the entire financial collapse, from sub-prime mortgages, to rating agencies, to the creation and handling of credit default swaps, is fraught with criminal fraud that both the Bush and now the Obama administrations have refused to deal with.