Treasury’s Miller: No Banks Will Be Bailed Out

MarketWatch, April 19, 2013. All Rights Reserved.

WASHINGTON (MarketWatch) – No financial institution, regardless of its size, will be bailed out by taxpayers again, Treasury Undersecretary for Domestic Finance Mary Miller said Thursday. As a result of the Dodd-Frank bank regulatory reform, "shareholders of failed companies will be wiped out; creditors will absorb losses; culpable management will not be retained and may have their compensation clawed back; and any remaining costs associated with liquidating the company must be recovered from disposition of the company’s assets and, if necessary, from assessments on the financial sector, not taxpayers," Miller said in a speech at the Levy Economics Institute of Bard College. Miller also said evidence was mixed on whether large financial institutions continue to benefit from lower borrowing costs. The Treasury will continue to work to reduce the risks posed by large financial companies and to put in place measures to wind the companies down if the need arises, Miller said.