Rodgin Cohen Says Treasury Report on Banks Endorses the Current System

The transcript discusses the challenges of unwinding large banks and the importance of maintaining flexibility in resolution methods. It defends the Orderly Liquidation Authority (OLA) as a last resort and addresses concerns about government discretion and taxpayer risk in the Treasury's new proposal. The discussion concludes with how banks should interpret the proposal, emphasizing that it endorses the current system while allowing for improvements.

What is the main reason for maintaining the Orderly Liquidation Authority (OLA) as a last resort?

• To provide flexibility in resolving bank failures

• To ensure banks can always declare bankruptcy

• To allow banks to take on more risk

• To eliminate the need for government intervention

What concern does the new Treasury proposal aim to address regarding government intervention in bank bailouts?

• Encouraging more risk-taking by banks

• Increasing the number of bank bailouts

• Allowing banks to operate without oversight

• Reducing the discretion of regulators

What is the issue of 'ringfencing' that is mentioned in the context of banking regulations?

• A way to enhance customer service

• A practice that limits the movement of capital

• A strategy to protect a bank's assets

• A method to increase bank profits

How should banks interpret the new proposals according to the final section?

• As a signal to change their business model

• As an endorsement of the current system with room for improvement

• As a requirement to increase their risk-taking

• As a complete overhaul of existing regulations

What remains unchanged about the Orderly Liquidation Authority (OLA) principles?

• Banks are encouraged to take more risks

• Shareholders are protected from losses

• Creditors bear all the losses

• Management is retained during liquidation