TBTF

The Federal Deposit Insurance Corp. says it's ready to wind down the global systemically important banks. But until that happens, many in the banking industry are skeptical that regulators have actually developed a workable strategy to end "too big to fail."

Federal Deposit Insurance Corp. Chair Martin Gruenberg said last week that regulators have the tools they need to allow big banks to fail in an orderly fashion. But resetting public and market expectations is not so easy.

Acting Comptroller of the Currency Michael Hsu said some large regional banks are at risk of becoming too big to fail, and the agency is considering ways to increase the resolvability of post-merger banks.

Banks weren't involved in the trading frenzy, but some observers say the regulatory response should address risks to all financial institutions.

Kyle Hauptman, who will be nominated to fill the seat held by Mark McWatters, is a staunch opponent of the Dodd-Frank Act. That could mean more policy clashes on the board if he is confirmed by the Senate.

If banks are unable to weather the economic fallout from the outbreak, calls for more dramatic reforms could get louder.

Community bankers keep harping on the illusory issue of "too big to fail." If they're serious about strengthening the economy, they should make more of an effort to unite the industry, not divide it.

Wells Fargo remains the TBTF poster child and regulators continue to do too little to address the problem. And as always, small banks suffer collateral damage.

The recent Dodd-Frank rollbacks for smaller banks could encourage risk-taking that leads to a systemic issue.

Cost cutting and systems integrations are short-term priorities, but over time CEO Kelly King and his heir apparent, Bill Rogers, will have to exploit the combined BB&T-SunTrust's revenue potential and prove the biggest post-crisis merger was a good idea.