Congress and the FDIC are considering easing limits on banks' holdings of such deposits, a move that could inadvertently lead to more expensive failures.
The solution to "too big to fail" is requiring all creditors, other than insured depositors, to face the risk of loss so that neither the FDIC nor taxpayers lose any money.
The central bank should not delay putting in place a long-term plan that diminishes its outsized influence and allows the financial markets to work without interference.