Wall Street's Banker Pushes for Bank Reform
Posted at 11 a.m. on Nov. 26, 2012
Simon Johnson highlights a recent speech by William Dudley, president of the Federal Reserve Bank of New York, in which Dudley made clear that lawmakers and regulators still have work to do on reforming the financial system
“First, he made clear that too big to fail remains with us. Some very large financial institutions receive implicit government subsidies in the form of downside protection… Second, I was struck by Dudley’s admission that the recently completed first round of living wills — potential liquidation plans drawn up by major financial institutions –has been far from satisfactory.”
“Third, Dudley is also perceptive on the difficulty of applying to global banks the ‘orderly liquidation authority’ of Dodd-Frank… The insurmountable obstacle — as critics have pointed out for at least three years — is that there is no cross-border framework or process for handling the failure of big financial institutions.”
