UPDATE 1-Fed's Fisher: Reorganize banks that are 'too big to fail'

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While, on the surface, this sounds good, it must be remembered that these banks still have a ton of toxic debt carried on their books at face or very inflated values that would likely be absorbed by the government (the taxpayers) at those inflated values. This would enable all the too big to fail institutions to split up into various entities that would all emerge with clean balance sheets after the reorganization.

If the FASB rules were reinstated before the reorganization, the insolvency would be apparent. An honest reorganization would take the form of a bankruptcy.

Jan 17, 2013 1:58pm EST  --  Report as abuse
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