Bankruptcy for Banks: A Sound Concept That Needs Fine-Tuning

by Mark J. Roe and David A. Skeel Jr.
New York Times

The House of Representatives is pushing to enact a bankruptcy act for banks.

It has passed a bankruptcy-for-banks bill, sent it to the Senate, and now embedded it in its appropriations bill, meaning that if Congress is to pass an appropriations bill this year, it may also have to enact the bankruptcy-for-banks bill.

Is that a good idea?

In concept, bankruptcy for banks makes sense: Why should they get the benefits of government bailouts that industrial companies rarely receive?

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