ROBERT SIEGEL, Host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
MICHELE NORRIS, Host:
A year ago today, jubilant Democratic lawmakers including then-Senator Christopher Dodd and Congressman Barney Frank joined President Obama on stage to sign a new financial reform law.
BARACK OBAMA: The American people will never again be asked to foot the bill for Wall Street's mistakes.
(SOUNDBITE OF APPLAUSE)
OBAMA: There will be no more tax-funded bailouts, period.
NORRIS: As NPR's Yuki Noguchi reports, it's not clear if the new law really means an end to government-funded bailouts.
YUKI NOGUCHI: But some experts believe the truth is actually a little murkier.
SARAH ROSEN WARTELL: To the question of whether too big to fail is gone or not? The jury is still out.
NOGUCHI: Regulators will require some large financial firms to file living wills or details about how their businesses operate. The theory is that, in the event of another crisis, this will would help the government wind down a failing business without disrupting the financial system.
ROSEN WARTELL: And the real question is whether the regulators will have enough strength to look at some of those plans. And where they see that there's too much systemic risk there, that it's going to be too hard to unwind these institutions, will they force restructurings and divestitures of some of these institutions? Not clear yet. That's one of these places where there's a great deal of discretion left to the regulator.
NOGUCHI: Wartell says whether the living will works and whether too big to fail ends depends largely on how muscular regulators are. She says opponents are trying to weaken the rules by delaying implementation or by threatening to cut funding.
ROSEN WARTELL: But I think we are better off than we were before the legislation - absolutely no doubt - and we have the promise of a more effective system.
NOGUCHI: Peter Wallison disagrees. Wallison is a senior fellow at the American Enterprise Institute. He was also a commissioner at the Financial Crisis Inquiry Commission who has, from the beginning, criticized the financial reform law.
PETER WALLISON: We have, in the Dodd-Frank Act, institutionalized too big to fail.
NOGUCHI: Wallison says by identifying large firms that need to file living wills, regulators are essentially saying: These are the companies that are too big to fail. He says investors will once again take that as a kind of implicit government guarantee.
WALLISON: And those companies will have major advantages over their smaller competitors. This is a serious, serious problem in my view.
NOGUCHI: Yuki Noguchi, NPR News, Washington.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.