Six Problems with the GOP Debate on Financial Reform – Roosevelt Institute

Nobody Wants to Be a SIFI

Actually, institutions declared systemically important fight against it, hard. GE sold off GE Capital, and in the process its chairman said “GE will work closely with [regulators] to take the actions necessary to de-designate GE Capital as a Systemically Important Financial Institution.” They wanted out.

MetLife is suing the government because it was designated SIFI status. Carl Icahn is pushing AIG to break itself up to avoid its SIFI status. JP Morgan sold off 6 percent of its assets to prevent having the highest SIFI capital surcharge applied to them. The Too Big To Fail subsidy that is supposed to explain why people would want SIFI status has shrunk dramatically toward zero since the crisis. There is no bragging. There is solid resistance, as there should be.

The candidates funded by the hedge fund industry and the big banks wold be complaining about Financial reforms and The Volcker rule if it wasn’t a burden to their funders. Banks do not want to be tagged as a SIFI. The costs imposed on them are too great. They would much rather externalize their risks to others and ultimately the tax payers. Internalizing their risks it bad for bonus season.