The Fed Keeps TBTF, Leaves the Scraps to the FDIC (Maybe)
let them fail
I can see how this will work out really well for everyone involved: the FDIC gets the bitches and the Fed gets the moneymakers. Chris Dodd's plan to drop as many regulatory mines as possible in the field before skipping off to get fat on the ranch appears to be working.
Financial institutions that have more than $100 billion in assets would continue to be overseen by the Federal Reserve, based on a legislative proposal under consideration in the Senate, according to people familiar with negotiations on broad bank-reform legislation.
The move would be a major switch for Senate Banking Committee Chairman Christopher Dodd -- and a potential victory for the Fed.
Last November, Dodd introduced a draft legislative proposal that would have stripped the Fed of its authority to supervise banks, so that it could focus more carefully on monetary policy and interest rates.
As part of this latest proposal, hundreds of smaller banks that are currently overseen by both state regulators and the Fed would have their federal oversight handled by the Federal Deposit Insurance Corp. instead.
The FDIC has absolutely no direct interest in the outcome of their "regulation" since if they find banks are insolvent or otherwise in violation, they'll have to take them on too. Yeah, that totally works.
Meanwhile, the FDIC is still trying to unload crap assets that no one wants. Perhaps it should start by requiring its banks to buy the shit, that would solve half of the problem until the next leak springs.