US Is Rushing to Get More Control Of Financial Giants

The White House and Congress are rushing to write legislation that allows the federal government to take over and unwind the businesses of a large financial institution—such as AIG or Citigroup —the way it now can with commercial banks, CNBC has learned. The regulatory authority—similar to the FDIC’s so-called bridge bank powers—was originally expected to be included in a broader reform package... [more]

The White House and Congress are rushing to write legislation that allows the federal government to take over and unwind the businesses of a large financial institution—such as AIG or Citigroup —the way it now can with commercial banks, CNBC has learned. The regulatory authority—similar to the FDIC’s so-called bridge bank powers—was originally expected to be included in a broader reform package addressing systemic risk. But now it's being crafted as stand-alone legislation in the wake of the public uproar over the AIG executive bonuses. http://www.cnbc.com/id/29386561 Make no mistake about it - this closes a big hole in the federal government's regulatory authority. AIG is going to be wound down & sold by the government, not left to its current management. Watch out hedge funds, bank holding companies, nonbank financial institutions: re-regulation is here to stay. It spells death to obscene bonuses based on short-term gains. Death to Manhattan real estate. The jig is up. [less]