by Barry Adler
The Dodd bill, just released by the Senate Banking Committee, would impose extensive new restrictions on the provision of financial services in the United States. These restrictions represent a fair price to pay for institutions that desire government backing, but they may prove insufficiently effective and unnecessarily stifling to companies that would prefer to go without government support.
To illustrate this point, consider what has come to be known as the Hotel California Provision, under which bank holding companies that have received TARP funds would be unable to avoid Federal Reserve supervision even if they eliminated their banks. In the words of the iconic pop lyrics: "You can check out any time you like, but you can never leave."
The Dodd bill, just released by the Senate Banking Committee, would impose extensive new restrictions on the provision of financial services in the United States. These restrictions represent a fair price to pay for institutions that desire government backing, but they may prove insufficiently effective and unnecessarily stifling to companies that would prefer to go without government support.
To illustrate this point, consider what has come to be known as the Hotel California Provision, under which bank holding companies that have received TARP funds would be unable to avoid Federal Reserve supervision even if they eliminated their banks. In the words of the iconic pop lyrics: "You can check out any time you like, but you can never leave."
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