Too big to fail should not mean restricted liquidity.

Hopefully they don’t use the liability side of banking for market discipline.

But as they don’t even know what a bank is and are in this way over their heads they might!

>   
>   (email exchange)
>   
>   On Tue, Apr 27, 2010 at 8:09 AM, Jason wrote:
>   
>   Possibly if the legislation succeeds in removing risk for those determining the setting…
>   
>   But one of the primary goals is to remove the lending subsidy provided by the TBTF
>   moniker
>   
>   If they firmly establish banks as no longer too big to fail, their short term credit ratings
>   could fall as far as tier 2 in some cases.
>   
>   Thus the average LIBOR setting may move higher just as their CP rates move higher.
>   
>   Also if they lose their ability to lend at lowest rates some of their businesses fall into
>   jeopardy (bank letters of credit, liquidity facilities for VRDNs etc)
>