Still Too Big to Fail?
HBO recently broadcast “Too Big to Fail,” the film adaptation of New York Times writer Andrew Ross Sorkin’s book of the same name. It’s a gripping recount of the 2008 meltdown — from the collapse of Bear Stearns and the Lehman bankruptcy that sparked a global crisis, to the government bailout of insurance giant AIG teetering on the brink of collapse and, finally, the largest banks reluctantly accepting TARP money.
The movie ultimately ends where it began — with enormous power and influence concentrated among only a handful of deeply interconnected banks. Proof that truth is often stranger than fiction.
Nearly three years later, the bailout debate continues. The New York Times reports that, during a recent high-profile panel discussion on whether Dodd-Frank ends “too big to fail,” some participants expressed skepticism — including a former Treasury Department official who helped oversee the AIG bailout and participated in the policy planning process that ultimately led to the Dodd-Frank Act.
Developing a policy framework to reduce systemic risk and close gaps in regulatory enforcement is an urgent challenge. Unfortunately, little progress has been made in the post-Dodd-Frank world, as we’ve reported here.
So much for a Hollywood ending.