Trump invites trouble in targeting FDIC resolution powers
By Lalita Clozel
President Trump is expected to sign a memorandum Friday asking for a review of Federal Deposit Insurance Corp. powers to unwind a failing large bank, becoming the latest torchbearer in a yearslong effort by the GOP to revamp the controversial provision of the Dodd-Frank Act. Yet the president and Treasury Secretary Steven Mnuchin, who is tasked with carrying out the review, are courting significant risks in targeting the authority, including the complexity in replacing it and fears it could heighten — rather than diminish — concerns about “too big to fail.” …“In the event it is repealed without an enacted reform to the bankruptcy code, we’d all better cross our fingers,” said Karen Shaw Petrou, a managing partner at Federal Financial Analytics. “OLA is slow-mo bankruptcy. It doesn’t save the company — it allows the government to step in and basically snatch order from potential chaos.”