Treasury Won't Ditch Post-Crisis Plan for Big-Bank Failures
- Dodd-Frank power should be tweaked, not scrapped, report says
- Treasury won’t side with those who want it erased as bailout
Rodgin Cohen Says Treasury Report on Banks Endorses the Current System
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U.S. bank watchdogs should retain the ability to dismantle massive, complex financial firms after a collapse, but should ensure the power is reserved “as an emergency tool for use under only extraordinary circumstances,” the Treasury Department said in a report released Wednesday.
The Trump administration’s disdain for the so-called Orderly Liquidation Authority granted to regulators after the 2008 financial crisis is clearly reflected in the report, which cites “serious defects” in the Dodd-Frank Act measure. The report urges lawmakers to focus instead on reforming U.S. bankruptcy laws to accommodate megabanks, a long-touted idea that has failed to clear Congress.