The Dodd-Frank Act has a lot of positive features needed to tame the ‘Too Big to Fail’ banks even though its rules can weigh on smaller banks, said John Bovenzi, author of ‘Inside the FDIC: Thirty Years of Bank Failures, Bailouts, and Regulatory Battles.’ Bovenzi added that the big banks do not need to be broken up just yet because Dodd-Frank provides a smart framework for winding down problematic institutions. He said the FDIC needs to do a better job of educating the public as to its role in protecting their deposits, especially in the wake of the IndyMac bankruptcy. Finally, Bovenzi said the closing and sale of WAMU was a textbook case of how to wind down a bank without increasing moral hazard.
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