Are Banks Too-Big-to-Fail?

                       

The Dodd-Frank legislation of 2010 supposedly was enacted, among its hodge-podge of intentions, to prevent big banks from failing. To do so, it helped impose rules on banks, against trading for their own accounts; so-called Volcker Rules, named after Paul Volcker, a former Chairman of the Federal Reserve.                                           

The Glass-Steagall Act, preventing commercial banks from being in the investment banking business, had been around under the Banking Act of 1934 until it was terminated during the Clinton administration.

                       

A similar law could probably have been passed now, without all the talk that casts gloom over industry and finance. Right now, commercial banks are spinning off trading activities for their own accounts but it’s difficult to distinguish activities done on behalf of clients.

                       

Yet,  banks are now bigger than ever and Dodd-Frank is murder to smaller banks. And, bigger than ever banks will continue to be too big to fail. (See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)