The Agenda

Chris Papagianis on Next Steps for Financial Reform

My Economics 21 colleague Chris Papagianis has written a comprehensive Reuters column on where the financial reform debate is moving post-Dodd-Frank. After noting Sandy Weill’s dramatic embrace of a Glass-Steagall-like separation between essential banking functions and more speculative financial functions, he presents the lay of the land:

(a) Thomas Hoenig, a director of the FDIC and a former Fed governor well-respected on the political right, is calling for a new Glass-Steagall, and he has found a growing number of allies among conservatives;

(b) a number of senators, primarily on the left but also on the right, are rallying behind the SAFE Act, which aims, among other things, to cap the share of total bank deposits any one financial institution can hold and to limit leverage;

(c) and there has been a renewed effort among lawmakers and academics to reform the bankruptcy code so that clear rules rather than regulatory discretion can be used to wind down large, complex financial institutions. 

I also recommend Sebastian Mallaby’s recent column on why investors might welcome an effort to break up too-big-to-fail lenders.

Reihan Salam — Reihan Salam is executive editor of National Review and a National Review Institute policy fellow.

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