Reuters is reporting that regulators on Wall Street have instructed the nation’s five biggest banks to begin making plans for how each would deal with another financial crisis and prevent an all-out collapse, hinting that government bail out may not be an option in the future.
These instructions are part of an ongoing two-year program, largely kept secret, to prevent a repeat of the 2008 financial crisis. Banks have also been forced to create “living wills” so that regulators know exactly how to unwind them should they fail in the future.
Of course, the best way to prevent another financial crisis isn’t to make Wall Street’s giants write living wills, it’s to break up Wall Street’s giants – and put in place regulation like Glass-Steagall to stop the banks form gambling with your money. It’s the least our lawmakers can do to turn banking back into the safe, useful, and boring industry is used to be in America.