With a vote on Senator Chris Dodd’s financial reform legislation soon on horizon, the issue of "Too Big To Fail" is coming to the forefront of today’s news. Stop Too Big To Fail has issued its first TV ad to be aired in Nevada, Virginia, and Missouri the week of April 19. The ads highlights our main issues with the legislation: during the financial crisis big banks and other financial institutions were bailed out while small investors suffered and had their tax dollars recapitalize such institutions while bank bonuses rebounded. A major problem in the legislation is a $50 billion bailout fund for large institutions funded by small investors.
The STBTF ad illustrates the critical flaws of the new financial reform bill which would allow for more big bank bail outs at the expense of small investors and business, and be paid for, by but not limited to, ordinary personal investment funds.
Those supporting the current legislation should realize that the proposed legislation sets a precedent to perpetuate the "Too Big To Fail." This viewpoint has been recently validated by Federal Reserve Bank of Richmond President Jeffrey Lacker:
"Proposals in the House and Senate will not stop banks from becoming "too big to fail." The legislation just perpetuates the dynamic that gave us ‘too big to fail' to begin with."
"Stop Too Big To Fail" begins the ad campaign with the intent to push aggressively the message across states whose Senators must show leadership and represent their constituents; it’s important for Senators to work in a bipartisan manner to achieve meaningful financial reform that does not perpetuate the problem of subsidizing large institutions that are Too Big To Fail.