An Analysis of Resolving Too-Big-to-Fail Banks Throughout the United States

The belief that some banks are too big to fail became reality during the financial crisis of 2007–2009 when the biggest banks in the United States were bailed out. Since then, big banks have grown much bigger and have become increasingly complex. This development has led to far greater attention on the need to resolve the too-big-to fail-problem. This paper examines the way in which the Federal Deposit Insurance Corporation has resolved troubled banks over time and throughout the various regions of the nation. The paper also examines post-crisis regulatory reform by focusing on the new orderly liquidation authority the Dodd-Frank Act provides to the FDIC to serve as the receiver for big banks whose failure poses a significant risk to the country’s financial stability. We assess whether this process will indeed eliminate the too-big-to-fail problem

Transparency Of Financial Regulation

This chapter explores the concept of transparency in financial regulation from the perspective of the public. It looks at the role of risk assessment in transparency and the regulatory environment as well as the importance of pluralism in competition in the financial sector. The chapter first considers the meaning of “transparency of financial regulation” and its relation to simplicity. It then traces the progression of the Basel capital adequacy framework from Basel I to Basel III, along with the sources of lack of transparency in the framework. It also presents data showing the lack of transparency in the Basel Capital Accord and countries’ regulatory responses to the global financial crisis. Differences in the implementation of regulation regarding systemically important financial institutions are outlined. Finally, it discusses recent proposals for the separation or separability of financial activities with the goal of enhancing the transparency of banks’ activities for both market participants and resolution authorities.https://digitalcommons.chapman.edu/business_books/1000/thumbnail.jp