4:39 PM » Dodd-Frank's Gift to AIG
In a recent interview on CNBC, AIG Chairman Bob Benmosche, said he expects his company to receive "systemically important financial institution" (SIFI) status - regulator speak for "too big to fail" (TBTF) - when the Fed and FDIC belatedly determine what firms constitute such "grave threats" to our economy. Under Dodd-Frank, a company determined to be a "grave threat" could face restrictions on its business activities or requirements that it divest assets or operations. Some have even suggested the law allows regulators to "break up" such firms to reduce systemic risk. Supporters of Dodd-Frank contend those restrictions and requirements end TBTF. But Mr. Benmosche is far from concerned about Dodd-Frank impeding his business. In fact, in the video below he praises the ongoing examination of AIG by federal regulators, indicating a positive review confers a "good housekeeping" seal of approval on the insurance giant. What's wrong with this guy? Why would a Wall Street giant like AIG welcome more regulations and greater scrutiny? As the American Enterprise Institute's Peter Wallison notes , Mr. Benmosche is no fool. "With the government behind it, reassuring the markets as to AIG's strength and taking every step to make sure this SIFI doesn't fail," he writes, "AIG will be a powerhouse in selling insurance." This isn't what the American people expected when Dodd-Frank was passed and it's not at all what hardworking taxpayers deserve.