Class 17 On To Big To Fail from the New Yorker Magazine

Class 17 On To Big To Fail from the New Yorker Magazine -...

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The Balance Sheet New Yorker Magazine March 8, 2010 Can We Admit There’s a “Too Big to Fail” Policy? Posted by James Surowiecki Felix Salmon has been doing a bang-up job in recent days of debunking the misinformed attacks on the relationship between credit default swaps and Greek interest rates. So it’s dismaying that on the subject of “too big to fail” banks, he’s engaging in precisely the kind of overwrought conspiracy-mongering that he’s otherwise so adept at puncturing. The occasion for Felix’s rant was an appearance on Thursday by Assistant Treasury Secretary Herbert Allison before the Congressional Oversight Panel for TARP . Throughout Allison’s testimony , the panel members pushed him to admit that there are certain financial institutions, like Citibank, that are legally considered “systemically significant,” and that the government has guaranteed them against failure. In other words, the panel members wanted Allison to admit that there is a formal “too big to fail” policy. Allison, though, consistently demurred, offering answers
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