Sherrod Brown and David Vitter are trying to bring some sense of caution and sanity to banks, especially the mammoth ones. They have introduced their own TBTF bill; however, TBTF here stands for Terminating Bailouts for Taxpayer Fairness. Unlike Dodd-Frank, they don't need hundreds of pages to define their proposal. The essential parts are greater equity holdings by the banks and an equal definition of risk for all banks.
Banks with assets greater than $500 billion would have to hold equity capital of at least 15 percent; banks with assets from $50 billion to $500 billion would have to hold 8 percent. Equity capital would be real money. Risk-weighting would not be allowed; banks will no longer be allowed to use a model of their own creation to weigh risk.
The bill is too sensible, too straightforward, not complex enough to pass.
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