Ending “too big to fail” — the idea that some financial institutions are so large that the government would bail them out rather than risk the damage to the financial system that would result from their demise — was a key goal of the 2010 Dodd-Frank financial reform law.
In remarks delivered before the Pew Charitable Trusts in Washington on Thursday, Treasury Secretary Jacob Lew said he thought the U.S. may have met that aim.
“Earlier this year, I said if we could not with a straight face say we ended ‘too big to fail,’ we would have to look at other options,” he said. “Based on the totality of reforms we are putting in place, I believe we’ll meet that test.”
But in the remainder of his remarks, which reviewed the steps the administration has taken since the financial crisis to ward off the next one, Lew said that constant vigilance — and well-funded regulators — would be necessary to spot future threats.
“To be clear, there’s no precise point at which you can prove with certainty that we’ve done enough,” he said of “too big to fail.” “If in the future we need to take further action, we will not hesitate.”
Some say additional steps are necessary now. Last month, Sens. Sherrod Brown, D-Ohio, David Vitter, R-La., and Carl Levin, D-Mich., sent a letter to financial regulators urging them to adopt stronger leverage requirements for big banks.
“Despite receiving assistance from taxpayers in 2008, today, the nation’s four largest banks — JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo — are nearly $2 trillion larger today than they were before the crisis. Their growth has been aided by an implicit guarantee — funded by taxpayers and awarded by virtue of their size — as the market knows that these institutions have been deemed ‘too big to fail,’ ” their offices said in a statement.
Regulators are expected to vote on a final version of a regulation banning banks from making speculative bets with their own money, known as the “Volcker Rule,” next week. It is a core provision of the Dodd-Frank law, and Lew has pressed the five agencies charged with writing the rule to finish it by the end of 2013.
What We're Following See More »
At the end of the debate, moderator Lester Holt asked Donald Trump if he stands by his statement that Hillary Clinton didn't have the look of a president. Trump responded by saying Holt misquoted him, instead saying that Clinton "doesn't have the stamina." Clinton responded by saying that when Trump visits 112 countries as secretary of state, he can talk to her about stamina.
Donald Trump, when pressed by Lester Holt on why he finally admitted that President Obama was born in America, repeated his widely debunked claim that it was started by Hillary Clinton.
Hillary Clinton went point by point on how race can so often determine the treatment that people receive, mentioning recent shootings in Tulsa and Charlotte, calling for restored trust between communities and police, and demanding criminal justice reform. Trump responded by calling for law and order and touting his endorsements from police unions. He then said that “African Americans are living in hell,” saying they are just walking down the street and getting “shot ... being decimated by crime."
Just as Hillary Clinton was inviting debate viewers to visit her site for real-time fact checking, there appeared to be a problem with Donald Trump's own campaign website. For about a 15-minute period, a blank page or an error message appeared when we tried to load the Trump site.
Donald Trump has come out in the first segment of this debate raring to go. Trump has interrupted nearly every answer being given by Hillary Clinton, talking over her time and again. Clinton is sticking to her guns, smiling while Trump speaks and then calling on people to go to her website and see the fact checking being done.