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groovedaddy

(6,229 posts)
Mon Nov 5, 2012, 12:00 PM Nov 2012

One Safety Net That Needs to Shrink

ELECTION Day is upon us, and neither President Obama nor Mitt Romney has really addressed one of the nation’s most pressing economic issues: the risk that one day taxpayers might have to bail out swashbuckling financial institutions again.

Granted, the economic pain many are feeling now — the snail’s pace recovery, the stubbornly high unemployment — is foremost in voters’ minds. But given all we’ve gone through after the last binge in the financial industry, failing to confront the too-big-to-fail question is a serious oversight.

Many Americans probably think the Dodd-Frank financial reform law will protect taxpayers from future bailouts. Wrong. In fact, Dodd-Frank actually widened the federal safety net for big institutions. Under that law, eight more giants were granted the right to tap the Federal Reserve for funding when the next crisis hits. At the same time, those eight may avoid Dodd-Frank measures that govern how we’re supposed to wind down institutions that get into trouble.

In other words, these lucky eight got the best of both worlds: access to the Fed’s money and no penalty for failure.

http://www.nytimes.com/2012/11/04/business/one-safety-net-that-needs-to-shrink.html?nl=todaysheadlines&emc=edit_th_20121104

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One Safety Net That Needs to Shrink (Original Post) groovedaddy Nov 2012 OP
Agreed, however this is the one safty net that will not be touched in the "Grand Bargain." Sam1 Nov 2012 #1

Sam1

(498 posts)
1. Agreed, however this is the one safty net that will not be touched in the "Grand Bargain."
Mon Nov 5, 2012, 12:15 PM
Nov 2012

and as far as the statement:

"In other words, these lucky eight got the best of both worlds: access to the Fed’s money and no penalty for failure."


I think that the proper word here is fraud not failure!
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