Jun 14

Past Event

Dealing with “Too Important to Fail” Banks

Video

Highlights

  • Dodd-Frank's Title II Would Change Bankruptcy and Liquidation Process

    Martin Neil Baily: Title I, stress tests and living wills are all designed to ask banks how they would go through bankruptcy. With Title II, this would be very different.

    Martin Neil Baily

  • Big Banks are Competitive

    H. Rodgin Cohen, Sullivan & Cromwell, LLP: I have seen no evidence that large banks are anti-competitive. I have seen no suggestion that smaller banks in communities without larger bank competition would offer lower loan rates or fees or higher rates on deposits.

  • Congress Needs to Change Bankruptcy Laws

    Thomas Hoenig, Federal Deposit Insurance Corporation (FDIC): We need to review and amend bankruptcy laws again so that banks can't use long-term assets to secure over-night funds.

Full Event

Audio

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Summary

There is a heated debate about how to handle banks that are too big or otherwise too important for governments to allow them to fail in a crisis. Some call for the largest banks to be broken up, or for them to divest all or part of their investment banking operations, in the spirit of the old days of the Glass-Steagall Act. Others suggest forcing banks to be funded with much more shareholder money to try to make failure very unlikely. Still others assert that the Dodd-Frank Wall Street Reform and Consumer Protection Act and global regulatory reforms have reduced the problem so much that major structural reforms such as these are unnecessary.

On June 14, the Economic Studies program at Brookings reviewed and debated the issue of bank size and bank funding. Panelists included FDIC Vice Chairman Thomas Hoenig, banking expert Rodgin Cohen, and Senior Fellow and Director of the Initiative on Business and Public Policy Martin Baily. Douglas Elliott, fellow in Economic Studies, served as moderator.

Join the discussion on Twitter using hashtag #TooBigToFail.

Event Agenda

Details

June 14, 2013

10:00 AM - 11:30 AM EDT

Falk Auditorium

1775 Massachusetts Ave., NW

Map

Join the Conversation

#toobigtofail

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Economic Studies