For some critics, it’s an article of faith that the Obama Administration’s financial reforms were a sham, that the Too-Big-To-Fail banks that shredded the system in 2008 are riskier than ever, that “Wall Street Won,” as my favorite magazine declared last year. But there’s a mountain of evidence that reform is working. And the mountain grew last week, despite the denials of the critics.
The strongest new evidence came from a July 31 General Accountability Office report, a report commissioned by congressional critics who expected it to show that bailouts of megabanks were likelier than ever. The report did not show that at all. It showed that expectations of government support for the biggest banks had declined significantly, along with the funding advantages created by those expectations. The report clearly suggested that thanks to the Dodd-Frank financial reforms, the Too-Big-To-Fail problem is becoming less of a problem.
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