Tag Archives: Senator Ted Kaufman

By Simon Johnson

Back when it really mattered – last spring, during the Dodd-Frank financial reform debate – Senator Ted Kaufman of Delaware emphasized repeatedly on the Senate floor that the proposed “resolution authority” was an illusion.  His point was that extending the established Federal Deposit Insurance Corporation (FDIC) powers for “resolving” (jargon for “closing down”) financial institutions to include global megabanks simply could not work. 

At the time, Senator Kaufman’s objections were dismissed by “experts” both from the official sector and from the private sector.  Now these same people (or their close colleagues) are falling over themselves to argue resolution cannot work for the country’s giant bank holding companies.  The implication, which these officials and bankers still cannot grasp, is that we need much higher capital requirements for systemically important financial institutions.

Writing in the March 29, 2011 edition of the National Journal, Michael Hirsch quotes a “senior Federal Reserve Board regulator” as saying: Continue reading →