Fumbling Through the Fog Around Too Big to Fail

July 9 (Bloomberg) -- When Republicans invite a Democrat totestify at a congressional hearing and Democrats invite aRepublican, we should pay attention. Such cross-partisanconnections aren’t common and typically indicate thatcongressional leaders are trying to answer difficult questions.That was certainly the case recently, when the House FinancialServices Committee held a hearing on how to end “too big tofail.”

Specifically, the topic of the June 26 session was“Examining How the Dodd-Frank Act Could Result in More Taxpayer-Funded Bailouts” -- whether the procedures put in place since2010 to handle the failure of very large financial institutionswould work, and whether we should expect the extraordinaryofficial support provided to those institutions to fade away.The conclusion: The problem of too-big-to-fail banks is aliveand well, and looms over our financial future.