Bernanke: No More "Too Big To Fail"

Fed Chair Ben Bernanke looks to end the "too big to fail" moral hazard scenario:

"The United States needs a safer way to shut down large nonbank financial firms without destabilizing the entire financial system, Federal Reserve Chairman Ben Bernanke said on Friday.

"We have such a regime for insured depository institutions, but it is clear we need something similar for systemically important nonbank financial entities," he said in prepared remarks to a community bankers convention in Phoenix.

"Improved resolution procedures for these firms would help reduce the too-big-to-fail problem by giving the government the option of safely winding down a systemically important firm rather than keeping it operating," he said.

True capitalism would let these big institutions fail. America doesn't have true capitalism so using that "market economy" angle when screwing over the little guy is even that much more vengeful. Little guys guys can fail, they deserve it. Big guys? Oh, they need all the government help and tax dollars they can get.

Source: NYT