As promised, the President of the Dallas Federal Reserve Bank, Richard Fisher, in concert with his research director, Harvey Rosenblum, Tuesday released what they said is a more detailed how-to for the big-bank break-up Mr. Fisher most recently promoted at last Friday’s CPAC meeting in Washington. Responding to criticism that the January refinements to the initial proposal still provided little specific guidance, the latest paper reiterates the call to deny discount-window access to non-traditional activities in a BHC and to require a “covenant” to ensure that counterparties eschew bail-out expectations. As before, the paper also promotes bankruptcy for all but insured depositories, arguing that FDIC receivership for banks is only possible if the biggest banks are broken into far smaller entities. This report assesses the additional details provided by Messrs. Fisher and Rosenblum, who use much of their paper to argue against rebuttals to their initial assertions – for example, they counter suggestions that their recommendations would crimp employment by arguing that broken up big banks would increase the number of banks and, thus, employment by them.

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