Geithner Goes After the Banks
Timothy Geithner has released his principles (pdf) for regulating the capital requirements of too-big-to-fail banks. Forcing big institutions to keep a larger cushion of cash could both curb the risk they pose to the system (as they'd have more money to bail themselves out) and make it less likely that smaller banks will want to become big enough to pose a risk to the system (because they'd have to operate under all these burdensome rules). Both are very good things, but the degree to which they actually happen depends on the stringency of the requirements.
I haven't read the principles yet, but people who know this stuff far better than I do are impressed. You can download them here.
September 4, 2009; 2:16 PM ET
Categories: Financial Regulation , Solutions
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Posted by: JimPortlandOR | September 4, 2009 3:17 PM | Report abuse
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