At last a Republican policy I can get behind February 25, 2014 at 8:26 pm

Bloomberg tells us of a lovely policy idea that I really hope comes to pass:

The biggest U.S. banks and insurance companies would have to pay a quarterly 3.5 basis-point tax on assets exceeding $500 billion under a plan to be unveiled this week by Congress’s top Republican tax writer.

Done right (i.e. without a powerful incentive to move assets to the shadow banking system), this could be a big shove towards ending too big to fail.

2 Responses to “At last a Republican policy I can get behind”

  1. Sometimes the simplest solutions really are the best.

    I should imagine this would be an inexorable incentive to move assets to the shadows; only possibly negated by firm restrictions on doing so?

  2. Indeed. One would want to watch out for the rapid growth of non-bank finance, especially if it was in leveraged vehicles.