Financial Services Oversight and Investigations Subcommittee Hearing Examines "Too Big to Jail" (with Lofchie Comment)

The House Financial Services Oversight and Investigations Subcommittee members questioned a witness from the Department of Justice regarding how the department decides which financial institutions are "too big to jail" and what information they rely upon to make such decisions.

Lofchie Comment: One hopes the Department of Justice acts cautiously in bringing criminal charges against any financial institution, big or small. Merely bringing charges may be sufficient to drive many financial institutions out of business. The reputational damage alone may provoke a bank run. When a company is driven out of business in this way, even assuming the guilt of a certain number of people in the company, thousands of others lose their jobs, retirees their pensions, investors their value and the government future taxes. See, e.g., Arthur Andersen.