Skip to comments.The FSOC Expands 'Too Big To Fail'
Posted on 07/22/2013 6:54:49 AM PDT by george76
The FSOCs decision to expand the too-big-to-fail designation to nonbank firms will be seen as the most damaging action taken under Dodd-Frank.
It was no surprise that the Financial Stability Oversight Council (FSOC) decided last week to cite a number of nonbank firms as systemically significant, placing them in line for greater regulatory scrutiny by the Federal Reserve. What was a surprise is that in the midst of a huge outcry in Congress about banks that are too big to fail (TBTF) neither Congress nor the administration asked the FSOC to stop the designation process until the too-big-to-fail issue had been fully thought through.
After all, by designating some nonbanks firms as TBTF GE Capital, AIG, and Prudential Insurance are in the group the FSOC has created a whole new set of institutions that will now be considered TBTF.
What the FSOC has done will be seen in the future as the most damaging action taken under the authority of Dodd-Frank. It has the potential to turn what are today competitive industries into financial sectors dominated by large, government-backed firms, exhibiting all the indicia of crony capitalism. The fact that it was done in the shadow of our disastrous experience with Fannie Mae and Freddie Mac, and while Congress was concerned about firms that are too big to fail, only demonstrates how mindless it really was.
(Excerpt) Read more at american.com ...
Isn’t Detroit TBTF?
Apparently the Obama regime doesn’t think we have enough crony capitalism yet. Those who were wondering whether his government would become national socialist or soviet socialist now have their answer. Obama is using the national socialist model as his inspiration.
Personally, I would let the free market decide whether a bank or other private company was too big to fail. If GM and BofA dropped off the grid, I’d content myself with “I guess they weren’t TBTF”. This will hurt ordinary people and job growth, just like everything else Obama has done in these terrible years.
The very definition of fascism.
This will mean that Insurance Companies have to hoard billions in cash, taking it out of the economy.
Thus explaining why obesity is on the rise in America.
FR’s please note how American Enterprize Institute’s Peter Walliston treats the reporting and use of acronyms. While he uses them, he also spells them out.
Thank You Mr Walliston
Damn, I thought the bailouts were just going to be for the banksters.
TBTF should automatically invoke antitrust, requiring that the business must be split into two or more competing organizations, with no shared executives or board members or major stockholders.
A SCOTUS decision that businesses cannot be split just because of their size is outdated.
Ironically, it truly is a National Security issue. If a single business can imperil the US economy, it needs to be broken up.