The Washington Post, March 5, 2018: Senate banking bill likely to boost chances of bank bailouts, CBO says
A bipartisan bill that’s on the Senate floor this week would increase the odds of government funding going to bail out failed banks, according to a new report from the Congressional Budget Office.
The bill, which is scheduled for an initial Senate vote Tuesday and is expected to pass the chamber as soon as this week, would roll back some of the regulations Congress put in place after the 2008 financial crisis. A major feature of the bill is exempting about two dozen financial companies with assets between $50?billion and $250?billion from the highest levels of regulatory scrutiny from the Federal Reserve. If passed, it would be the most substantial weakening of the regulations put in place by the 2010 Dodd-Frank law that strengthened financial regulations.
The CBO report says those exemptions make it more likely a bank would collapse and lead federal officials to stabilize it with public funds. The CBO notes that this scenario is unlikely in any given year, but it says the bill makes it more probable.