The US financial reform legislation would make the United States a model for the world, the former US Fed chairman and now economic adviser to President Obama said according to the NYT.
The US financial reform legislation would make the United States a model for the world, the former US Fed chairman and now economic adviser to President Obama said according to the NYT.
“The United States will go from laggard to the head of the parade if we get this legislation passed,” Mr. Volcker said during the IOSCO conference in Montreal. “This American legislation will be a kind of launching point for other countries.”
It is important that the final legislation set up a “resolution agency” with the power to immediately sweep in and take over troubled, large financial institutions, Mr. Volcker said.
He said the existence of an agency with a mandate to swiftly shut troubled financial institutions would make it less likely that large entities would take risks with the confidence that their sheer size would force the federal government to bail them out if things went wrong.
The resolution agency, which Mr. Volcker called “a quick form of bankruptcy,” would have “a clear mandate that the institution will be liquidated.”
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© New York Times
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