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Too Many To Fail: Against Community Bank Deregulation, Jeremy C. Kress, Matthew C. Turk
Too Many To Fail: Against Community Bank Deregulation, Jeremy C. Kress, Matthew C. Turk
Northwestern University Law Review
Since the 2008 financial crisis, policymakers and scholars have fixated on the problem of “too-big-to-fail” banks. This fixation, however, overlooks the historically dominant pattern in banking crises: the contemporaneous failure of many small institutions. We call this blind spot the “too-many-to-fail” problem and document how its neglect has skewed the past decade of financial regulation. In particular, we argue that, for so- called community banks, there has been a pronounced and unjustifiable shift toward deregulation, culminating in sweeping regulatory rollbacks in the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018.
As this Article demonstrates, this deregulatory trend rests …