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"To end 'too big to fail,' the new regime should permit regulators to close a failing firm and impose losses on shareholders and creditors," he said.
A failing firm isn't exactly news.
Which agency should be responsible for seizing a failing firm?
Under the bill, once the Treasury stepped in to take over a failing firm, the Federal Deposit Insurance Corporation would be appointed as a receiver.
She reckons we should just deal with the short-term pain of some banks failing, firm bankruptcy, and job loss and move on when the market re-equilibrates.
Also, creditors of a failing firm would be forced to pay back the government any money they received above what they would have gotten under a bankruptcy proceeding.
Similar(36)
The Administration's approach to ending Too Big To Fail includes stronger, more comprehensive regulation, higher capital requirements, new resolution authority to allow failing firms to fail, and restrictions on the size and scope of financial institutions.
But how – and this is far trickier – do you identify failing firms before they do?
Media coverage of failing firms and layoffs contributed to mounting uncertainty and fear.
Without good investment opportunities available (given economic conditions) these loans merely propped up failing firms.
Earlier this year, Spain adopted new rules making it less hard to restructure failing firms.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com