- Collection:
- Georgia Law Review
- Title:
- The Financial Industry's Plan for Resolving Failed Megabanks Will Ensure Future Bailouts for Wall Street
- Creator:
- Wilmarth, Arthur E., Jr.
- Date of Original:
- 2015-01-01
- Subject:
- University of Georgia. School of Law
Law--Study and teaching
Georgia Law Review Association - Location:
- United States, Georgia, Clarke County, Athens, 33.96095, -83.37794
- Medium:
- essays
- Type:
- Text
- Format:
- application/pdf
- Description:
- Wall Street has achieved a remarkable political comeback from the financial crisis of 2007-2009. Public anger over bailouts of large financial institutions spurred Congress to pass the Dodd- Frank Wall Street Reform and Consumer Protection Act (Dodd- Frank) in July 2010.1 Megabanks, however, used their political influence to weaken Dodd-Frank's provisions, and they have pursued a determined campaign since 2010 to undermine Dodd- Frank's implementation. A primary goal of Dodd-Frank is to end "too big to fail" (TBTF) treatment for systemically important financial institutions (SIFIs) and their creditors. During the debates over Dodd-Frank, however, Wall Street defeated two major initiatives that would have threatened megabanks' TBTF status. First, Wall Street's political allies voted down a proposed amendment by Senators Sherrod Brown and Ted Kaufman, which would have forced a breakup of the six largest U.S. banks. Second, Wall Street's allies blocked proposals that would have required the largest financial institutions to pay risk-based premiums to prefund the Orderly Liquidation Fund (OLF). As discussed below, the OLF provides funding for resolving failed SIFIs under Title II of Dodd-Frank. Due to Wall Street's success in defeating the prefunding proposals, the OLF currently has a zero balance and must rely on borrowings from the Treasury Department (Treasury) and, ultimately, taxpayers.
Financial Industry -- Failed Megabanks -- Bailouts for Wall Street -- Antitrust and Trade Regulation -- Banking and Finance Law -- Law -- Securities Law - External Identifiers:
- Metadata URL:
- https://digitalcommons.law.uga.edu/glr/vol50/iss1/5
- Holding Institution:
- Alexander Campbell King Law Library
- Rights:
-
