Frank, Geithner to Roll Out 'Too Big to Fail' Bill
New rules will impose 'living wills' for banks
By Jason Farago,  Newser Staff
Posted Oct 26, 2009 6:57 AM CDT
Treasury Secretary Timothy Geithner speaks before the start of the the G-20 summit, Thursday, Sept. 24, 2009 in Pittsburgh.   (AP Photo/J. David Ake)
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(Newser) – After months of negotiations, Congress and the Obama administration are ready to introduce new rules on financial institutions deemed "too big to fail." Barney Frank, who heads the House Financial Services Committee, will present a bill as soon as this week that will let the government seize companies, fire executives, wipe out shareholders, and rejigger loan books. Tim Geithner is planning to endorse the plan in testimony on Thursday.

Under the Geithner-Frank plan, companies will have to set up individual crisis procedures, a system the New York Times calls "living wills for corporations." But other policymakers and economists, including Britain's central banker and former Fed chairman Paul Volcker, are urging more drastic action: the breakup of overlarge banks, whose market share has only grown after Lehman and Bear Stearns collapsed. Ben Bernanke said on Friday he prefers "a more subtle approach," and an administration official called breaking up the banks "more a provocative idea than a proposal."