In the aftermath of the 2008 financial crisis, a consensus quickly developed in Washington: no more bank bailouts. The law allows for federal money to be used to keep commercial banks and other subsidiaries of the firm running during the shutdown. But Republicans said the use of federal money to wind down a firm is a bailout and they doubt the funds ever would be recovered from the industry. But after the TARP rescues, which left bank shareholders largely intact, the liquidation authority was designed to prevent that. Beyond that, he said, neither the Democratic nor the Republican strategy for dealing with a failing financial giant is foolproof.

Source: Los Angeles Times August 07, 2017 12:02 UTC