Bankruptcy

The Trump administration’s examination of Dodd-Frank Act powers to allow regulators to seize and unwind a failing megabank is drawing criticism from supervisors at home and abroad.

Repealing or modifying regulators’ authority to take over failing banks may actually increase the risk of taxpayer-funded bailouts, said former Federal Reserve Board Gov. Daniel Tarullo.

Bank earnings could be hurt this year as big retailers close stores and file for bankruptcy. The situation has sparked a debate about how much CRE and C&I books will suffer just as lenders were putting other commercial woes behind them.

The pieces of a more equitable fate for troubled financial giants are beginning to come into view as evidenced by this week´s private-sector rescue of CIT. The lender´s salvation may serve as a prop for future government bailout strategies. But its ordeal is also further proof that the government needs more power to seize and resolve large companies.