Bailout Architect: Dodd-Frank Won't Stop Another "Reactor Meltdown"

[99th_Monkey]

Bailout Architect: Dodd-Frank Won't Stop Another "Reactor Meltdown"
by By Sam Knight, The District Sentinel | Report * 17 February 2016 * TruthOut

The president of the Minneapolis Federal Reserve and a former Treasury Department official who helped craft the 2008 Wall Street bailout warned that Dodd-Frank financial reforms won't stop the US government from rescuing "Too Big to Fail" banks.

Neel Kashkari said Tuesday in Washington that the landmark legislation has helped "strengthen our financial system" with a variety of new regulations, but that they won't prevent federal officials from extending publicly-funded emergency lifelines to crucial industry actors.

"No rational policymaker would risk restructuring large firms and forcing losses on creditors and counterparties using the new tools in a risky environment, let alone in a crisis environment like we experienced in 2008," Kashkari said.
He described financial crises as being like a nuclear "reactor melt down," and said the US remains vulnerable to another one, with only a handful of banks still dominating the financial sector.

Kashkari called on Congress to reduce this system-wide hazard by passing legislation. He said it should consider hiking taxes on risky behavior, breaking up the largest banks "into smaller, less connected, less important entities," and "turning large banks into public utilities…with regulation akin to that of a nuclear power plant."

"Options such as these have been mentioned before, but in my view, policymakers and legislators have not yet seriously considered the need to implement them in the near term," he remarked. Kashkari additionally noted that "the financial sector has lobbied hard to preserve its current structure," but that "the economy is stronger now, and the time has come to move past parochial interests and solve this problem."

http://www.truth-out.org/news/item/34867-bailout-architect-dodd-frank-won-t-stop-another-reactor-melt-down

[JRLeft]

1. Hillary is against this.

[malokvale77]

2. Just one reason I'm against her. nt

[HooptieWagon]

3. A friend of mine...

...is a county judge. His previous career was a professor of Economics and Finance ...he has PhDs in both. He was a great source of info on the financial meltdown, and his opinion of Dodd-Frank is that it's more worthless than toilet paper. He said the meltdown was deliberate, and they'll do it again.