Treasury secretary Jack Lew declared victory against “too big to fail” banks and said the US would focus on holding the rest of the world to that higher standard.
“I said if we could not with a straight face say we ended ‘too big to fail’, we would have to look at other options,” he said. “Based on the totality of reforms we are putting in place, I believe we will meet that test. But to be clear, there is no precise point at which you can prove with certainty that we have done enough. If, in the future, we need to take further action, we will not hesitate.”
Mr Lew said the newly completed Volcker rule, which bans proprietary trading and will be voted on by regulators next week, along with stronger capital and liquidity requirements and plans to wind down failing banks, have made the financial system safer and stronger.
“Too big to fail” is the concept that certain banks are so vast that the government would need to step in with a taxpayer-funded bailout if they failed.