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Dodd-Frank, sauvetage des institutions financières et crise financière : le problème du too interconnected to fail

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  • James P. Hawley

Abstract

The article argues that a major omission in the Dodd-Frank financial reform act focuses on the problem of to interconnected to fail banks and non-bank (shadow) banks. While Dodd-Frank promises ?no more? bailouts of too big to fail banks (TBTF) and non-bank banks, the paradox of a lacking a major focus on too interconnected to fail institutions (TITF) is actually to: increase systemic risk under some conditions; and create a ?back door? set of complex and contorted processes to ?bailout? financial institutions in spite of political promises not to. This is accomplished by removing 'bailout? authority from the Federal Reserve and creating an Orderly Liquidation Authority modelled on the Federal Deposit Insurance Corporation which along with the Department of the Treasury can in fact ?bailout? financial institutions under certain conditions. Yet this new authority may fail given its focus on TBTF rather than (as well) TITF structures. Classification JEL: G01, G18, G21, G28.

Suggested Citation

  • James P. Hawley, 2012. "Dodd-Frank, sauvetage des institutions financières et crise financière : le problème du too interconnected to fail," Revue d'économie financière, Association d'économie financière, vol. 0(1), pages 251-264.
    • Handle: RePEc:cai:refaef:ecofi_105_0251
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    More about this item

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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