Sen. Sanders' "Too Big To Fail" Bill Isn't a Serious Proposal

[MFrohike]

46. Heh

Brown's bill isn't that great. It delegates quite a bit of authority to the regulators, who've repeatedly shown that they're not to be trusted. I'd like it better, though still not much, if it was preceded by a wholesale house cleaning at the Fed. The bill allows the Fed to grant emergency waivers for the leverage ratios, as well as the power to adjust the leverage ratios. Considering the run of Fed Chairs we've had since Eccles and Martin, that's terrifying.

Sanders' bill is an outline, not an actual bill. Yes, I realize it's been introduced, but it's incomplete. It bans speculative use of derivatives without defining either term. It requires, in plain language, the breaking up of these banks without defining exactly what that means. It reads like a notepad sketch, not legislation.

Long story short, the writer of that blogpost is snarky and ignorant. A cursory reading of both bills reveals enormous shortcomings when the real world of financial regulation is considered. It'd have been better for the writer just to stay silent, rather than so vividly expose his or her ignorance.