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gruffydd

Too Big To Fail In The Usa

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http://www.huffingtonpost.com/2009/09/24/v...s_n_298429.html

WASHINGTON — A top White House economic adviser says the Obama administration's proposed overhaul of financial rules preserves the policy of "too big to fail," and could lead to future bailouts.

Former Federal Reserve Chairman Paul Volcker said Thursday that by designating some companies as critical to the broader financial system, the plans create an expectation that those firms enjoy government backing in tough times. That implies those financial companies "will be sheltered by access to a federal safety net," he said.

Edited by gruffydd

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http://www.huffingtonpost.com/2009/09/24/v...s_n_298429.html

WASHINGTON — A top White House economic adviser says the Obama administration's proposed overhaul of financial rules preserves the policy of "too big to fail," and could lead to future bailouts.

Former Federal Reserve Chairman Paul Volcker said Thursday that by designating some companies as critical to the broader financial system, the plans create an expectation that those firms enjoy government backing in tough times. That implies those financial companies "will be sheltered by access to a federal safety net," he said.

In fact he didn't slam Obama at all lol

In the same article: "Volcker said he does not differ with the administration on most of its proposals, and takes "as a given" that banks will be bailed out in times of crisis.

But he said he opposed bailouts of insurance firms like American International Group Inc., automakers' finance arms and others. "The safety net has been extended outside the banking system," Volcker said. "That's what I want to change." He said the administration's proposal to create a new system for winding down large nonbank companies would make that easier. The administration should make it clearer that "safety net" will apply only to traditional banks, not investment companies or others, he added."

Where's the 'slamming'? :rolleyes:

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In fact he didn't slam Obama at all lol

In the same article: "Volcker said he does not differ with the administration on most of its proposals, and takes "as a given" that banks will be bailed out in times of crisis.

But he said he opposed bailouts of insurance firms like American International Group Inc., automakers' finance arms and others. "The safety net has been extended outside the banking system," Volcker said. "That's what I want to change." He said the administration's proposal to create a new system for winding down large nonbank companies would make that easier. The administration should make it clearer that "safety net" will apply only to traditional banks, not investment companies or others, he added."

Where's the 'slamming'? :rolleyes:

Well, that's strong criticism from an insider. I've moderated the headline anyway...

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