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March 31, 2010 Wednesday
Geithner: Financial reform bill will end ‘too big to fail’
The financial regulatory reform bill is shaping up to put an end to the concept of “too big to fail” institutions and ensure that taxpayers do not face the necessity of another big bailout, Treasury Secretary Timothy Geithner told CNBC.
The financial regulatory reform bill is shaping up to put an end to the concept of “too big to fail” institutions and ensure that taxpayers will not face another multibillion-dollar bailout tab, U.S. Treasury Secretary Timothy Geithner told CNBC in an interview on March 29.
Geithner said the financial reform bill introduced by Senate Banking Committee Chairman Christopher Dodd, D-Conn., gives the government the ability to seize and liquidate large banks that are on the verge of collapse. Geithner also emphasized the importance of identifying the largest financial institutions and ensuring that they are subject to tougher capital requirements and constraints on risk-taking.
Dodd’s financial reform bill was approved by the Senate Banking Committee on March 22. The committee’s ranking Republican member, Sen. Richard Shelby of Alabama, had raised concerns that the bill will not end the too big to fail problem because the emergency lending authority granted to the Federal Reserve under the bill as well as the emergency authority granted to the FDIC and the U.S. Treasury Department to provide debt guarantees in times of economic distress allows a loophole to fund failing institutions.
April 6, 2010