Free Republic

Bet you thought Dodd-Frank was just designed to go after those greedy banks on Wall Street didn’t you? Well, there are always unintended consequences of regulation. Dodd-Frank is one of the worst bills ever passed by a Congress in the history of the United States. Not only is it proving to restrict access to money by poor people, it is imposing crushing costs on smaller banks-effectively putting them out of business. This makes access to capital even tougher, because instead of going to a small bank where you can develop a relationship, a businessman now needs to go to a...

Congressional officials say Democratic and Republican negotiators on a sweeping overhaul of banking regulations have agreed to jettison a $50 billion liquidation fund from the bill. The fund would have been financed by large financial institutions and would have been used to cover the government's initial costs of taking down a giant failing firm. Instead, the new agreement requires the government to recoup the costs of liquidation from creditors, with other financial firms covering outstanding costs only as a last resort.The agreement sets in place assurances Republicans received from Democrats last week that removed objections that had kept the bill...

Now that Senate Republicans have produced their own proposal, this much is known for certain: after Congress finishes doing whatever it is going to do regarding financial market reform, the country will still have financial institutions policymakers regard as too big to fail. And when the financial system is again under stress, there will be more bailouts. The narrative driving financial market reform is this: Large financial institutions took too many risks and were overleveraged. They were all so interconnected that failure of one would be a contagion that might collapse the entire U.S. financial system. So, the federal government...

Congress is determined to pile regulation upon mistake, adding to the rickety regulatory pyramid of futility and failure.  They are crafting a  Back Door Bailout.   The House bill contains an authorization for the Federal Reserve for $4 trillion in “secured loans” to bailout individuals, partnerships or corporations in financial distress. Page 506 of the House passed bill, titled the Wall Street Reform and Consumer Protection Act states in part: "The amounts made available under this subsection shall not exceed $4,000,000,000,000." The Senate bill has the same loan authority with no cap on the amount of funds available to failing...