The federal reserve adopted a new rule that limits there ability to loan out money to banks who are going bankrupt. This rule is mainly taken from the Dodd-Frank act of 2010 that was passed following the recession and irresponsible policies from executives in wall street. Basically federal reserve can't use emergency funds on major banks. Now some people see this as a big step forward and common sense stuff that should've been done earlier. While this is common sense it doesn't actually do much in the way of stopping corruption with banks. It does allow for more control over federal reserve spending but it really is just a start. The fed can still judge a firm and determine whether it needs help it just can't come from emergency funds and wont work on huge firms like a citi or wells fargo. At the end of the day this along with a re-institution of Glass-Steagal could help prevent such problems that hurt us in the future. The fact is this idea is very similar to what federalist wanted but instead of just a national bank we want to regulate the commercial banks to protect U.S citizens from bad practice. Now these laws may not seem like they can keep banks from not using risky practices like sub-prime lending. Thing is they actually could if the banks aren't sure they'll get bailed out by the government they shouldn't be willing to take such risk. Hopefully this first rules can help push forward more legislation to deal with these mega-banks that have amassed so much money.
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