What happened to the too-big-to-fail banks 30 years ago?

The most recent financial crisis made it clear that something finally had to be done to make sure that big banks would never again pose such a systemic threat to the financial system that they would have to be bailed out by the government. Under the Fed's proposal, announced in testimony by Gov...

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Bibliographic Details
Published in:Banking & Financial Services Policy Report 2014-12, Vol.33 (12), p.14
Main Authors: Barth, James R, Sau, Moutusi
Format: Article
Language:English
Subjects:
Bailouts
Bank acquisitions & mergers
Bank failures
Bank holding companies
Banking industry
Big business
Capital requirements
Congressional committees
Foreign banks
National banks
Regulation of financial institutions
Regulatory approval
Risk
Wall Street Reform & Consumer Protection Act 2010-US
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Summary:The most recent financial crisis made it clear that something finally had to be done to make sure that big banks would never again pose such a systemic threat to the financial system that they would have to be bailed out by the government. Under the Fed's proposal, announced in testimony by Gov Daniel K. Tarullo before the Senate Banking Committee on Sep 9, 2014, the capital requirements imposed on the largest banks would be even higher than those being recommended for international banks by the Basel Committee on Banking Supervision. Despite all the concern over "too big to fail," bank regulators allowed the big to get bigger. It is clear that no real progress has been made on resolving the too-big-to-fail issue for most of the past three decades. How ironic that the regulators allowed, and in some cases even encouraged, big banks to get bigger over the past 30 years and now have designed regulations to make those same banks smaller.
ISSN:1530-499X