Fed's focus on 'too big to fail' won't save taxpayers from next bank bailout
- Written by Oz Shy, Senior Lecturer in Economics, Massachusetts Institute of Technology
Last month, the Federal Reserve announced that 31 out of 33 U.S. banks had passed its latest “stress test,” designed to ensure that the largest financial institutions have enough capital to withstand a severe economic shock.
Passing the test amounts to being given a clean bill of health by the Fed. So are taxpayers – who were on...
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