Daylife/Reuters Pictures used by permission
The U.S. Senate Banking Committee will remove a provision from the financial reform bill that bank regulator Sheila Bair said could allow for “backdoor bailouts,” a panel spokeswoman said on Friday.
Sheila Bair, chairman of the Federal Deposit Insurance Corp, told a conference of community bankers earlier on Friday that the agency had “serious concerns” about a provision in the bill that seems to allow the Federal Reserve to rescue Wall Street firms if their functions were critical to the markets.
That provision will be removed in an amendment as the Senate Banking Committee debates the draft bill, committee spokeswoman Kirstin Brost told Reuters.
“If the Congress accomplishes anything this year, it should be to clearly and completely end ‘too big to fail,'” Bair said at a conference of the Independent Community Bankers of America.
Bair said small banks deserve an even playing field and that larger institutions are still enjoying benefits from an implicit government guarantee. “These signs all point to a presumption in the marketplace that the largest banks are, indeed, too big to fail,” Bair said.
The FDIC chief, a critic of some of the government’s massive rescues of Wall Street firms, has been one of the strongest advocates of creating a “resolution mechanism” that would allow the government to dismantle a failing financial firm…
Sheila Bair appears to be on the side of working folks and community banks. Unlike creeps like Chris Dodd who I wouldn’t trust any further than I could throw him uphill into a heavy wind, left-handed.
If she wasn’t there pointing out some of the crap living inside Dodd’s “regulatory” bill – well, what would we get? What criticisms have you heard from your favorite Congress-critter?
Republicans whine about any regulation over their Wall Street buddies. Come to think of it, the caviling may be phrased differently by some of the Dems; but, most of them are as useless as Dodd.