Saturday, January 15, 2011
This sounds great, but it's complete baloney. How do we know? Because in SIGTARP's recent report on Extraordinary Financial Assistance Provided to Citi, Geithner admits, in no uncertain terms, that the fabled "resolution authority" will never actually be used and that taxpayer-funded bailouts are still on the table. The report notes:
"As Secretary Geithner told SIGTARP, while the Dodd-Frank Act gives the Government 'better tools,' and reduced the risk of failures, '[i]n the future we may have to do exceptional things again' if the shock to the financial system is sufficiently large. Secretary Geithner's candor about the prospect of having to 'do exceptional things again' in such an unknowable future crisis is comendable. At the same time, it underscores a TARP legacy, the moral hazard associated with the continued existence of institutions that remain 'too big to fail.'" '
Posted by DotConnector at 10:56