The Treasury has proposed a new bill it claims addresses "systemic risks" and "too big to fail" institutions. It does neither, and in fact it creates new moral hazards by extending the federal safety net.

The bill would officially extend for the first time in history the government safety net to non-bank companies engaged in financial activities. Identification of firms systemically important enough to feel the government's embrace is delegated to a council of unelected government officials.

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