Obama Preserves 'Too Big to Fail'

Former Federal Reserve Chairman Paul Volcker, who serves as the head of Obama’s Economic Recovery Advisory Board, has said that the administration’s planned overhaul of financial rules preserves the policy of “too big to fail.” By designating some companies as critical to the financial system, Volcker said, the administration was implying those companies “will be sheltered by access to a federal safety net.” Volcker said he supports the bailing out of banks during financial crises, but that nonbank companies like insurance firms and automakers should not be saved with federal money.