This is the Cato Dilly Podcast for Monday, February 11th, 2013.

I'm Caleb Brown.

The Financial Reform of 2010, known as Dodd-Frank,

got much of the diagnosis wrong for the financial crisis, so it's not surprising that the

prescription is also inadequate.

Louise Bennets, the Associate Director of the Cato Institute's Financial Regulation Studies,

comments on those problems, and how they'll impact the next big

crisis, sovereign debt.

You see a lot, or we've seen a lot recently in the press about too big to fail and specifically you know there's this sort of a debate

going on about whether we've solved this problem of too big to fail and and there's

one school of thought the Tom Honex of the world who argue that we haven't,

that Dodd-Frank has done nothing to address the problem of too big to fail, that individual

institutions are too large, that they need to be broken up and made smaller and that that will make

You know deal with the systemic risk problems that we face

There's another school of thought that says no you can have these large institutions so long as you as long as you monitor them closely

I I look at it in a slightly different way. I think that the problem isn't that we have an issue of

of individual institutions being too big to fail. What happened prior to 2008, I think, was that you found different institutions are governed by

different ways of resolving so if they get into into trouble they're subject

to different types of laws and that creates a lot of complications

when you have a multifunctional financial institution and that's not a problem

with the with the institution that's a problem with the rules governing, you know, the bankruptcy or resolution of that institution.

So I'll give you an example.

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