This is the Cato Daily Podcast for Friday, July 9th, 2010.

I'm Caleb Brown.

The House Past Financial Services Reform Bill, if you listen to the White House and Bill

Trafters, ends so-called too big to fail.

But it doesn't, says Mark Calabria, director of financial regulation studies at the Cato Institute,

he says the proposed reforms transfer more power over resolving troubled institutions to administrators, the executive branch,

and away from bankruptcy courts.

For the purposes of explaining what is in the House Past financial reform bill, what is the difference

between bankruptcy and receivership? The essential difference is that receivership is a bankruptcy like process that's run by an administrative agency.

In the case of banks, it's run by the Federal Deposit Insurance Corporation.

Quite off at the state level, for instance, state insurance

commissioners are run a receive research process.

So A, it's run not by the courts, but run by an executive branch agency and B it often has far more

discretion in terms of rewriting contracts in terms of changing priority of

claims which is you know where do you stand in line in terms of getting paid off?

And also, whether similarly situated claimants, you know, treated the same.

President Obama has shown no reluctance thus far to engage in that type of rearrangement of the people's place in line

when it comes to collecting on bonds, collecting on all types of corporate assets.

We even seen any of that.

That's a very good point.

And what we saw, for instance, and the auto bailouts, and this was done before you went into a

bankruptcy court because where the UAW employees were placed in front of the

...