Simon Johnson and John Parsons chide Mary Miller April 26, 2013 at 1:11 pm
In a speech on last week Mary Miller, Treasury under secretary for domestic finance, made the case that the Dodd-Frank reform legislation has substantially ended the problem of too-big-to-fail financial institutions. Johnson and Parsons don’t agree, writing in the NYT:
Ms. Miller’s speech is completely unconvincing on the substance of the points that she is trying to make. Dodd-Frank alone will not end too big to fail.
It makes sense that senior Treasury officials should want to put Dodd-Frank into effect. But it is disconcerting when they are unable to confront the market and political realities of too-big-to-fail banks. Any such level of denial will not serve us well.
The detailed analysis is worth going through and, broadly, convincing. It does seem interestingly as if the argument is lining up as some politicians, most independent commentators and much of the voting public saying more needs to be done, with the FED and the big banks against. That isn’t a common side selection, and it will be interesting to see how it plays out.