Thursday, April 29, 2010

Financial Reform Moves Forward

"Republicans said they now expect Democrats to jettison a $50 billion fund that would have been financed by banks to help liquidate large failing institutions. "

This would be a terrible mistake. Right now, that $50 billion fund is what's preventing the next "too big to fail." It forces banks to put their money on the line - and if one of their number should fail, they don't get bailed out by the government.

They get shut down. The $50 billion goes to protecting the checking/savings/CDs and the like of their customers. Their employees get their final paycheck, the assets are sold, and the investors are left with *nothing* for their bad investment.

Democrats should not remove that provision. If anything, they should replace it with a provision that makes any bank larger than $100 billion dollars automatically broken up into smaller pieces.

One of these two choices is the only way to stop "too big to fail" from ever happening. Either a giant liquidation program to shut down a bank failure, or breaking up banks when they get too big.

Pick your poison, Republicans. Because taxpayers aren't paying for socialized Wall Street anymore.
Read the Article at HuffingtonPost

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