Senator Dodd calls for new bankruptcy law
Senator Christopher Dodd, co-author of the Dodd-Frank Act, which was crafted in response to the financial meltdown of Lehman Brothers in 2008, believes that more must be done to prevent bankruptcies.
Senator Christopher Dodd, co-author of the Dodd-Frank Act, which was crafted in response to the financial meltdown of Lehman Brothers in 2008, believes that more must be done to prevent bankruptcies.
Dodd said in an interview, that he fears bankruptcy courts could be ill-equipped to handle such collapses in the future.
The Dodd-Frank Act, established a system to wind down companies of systemic importance; however, he warns that firms that don't trigger a response may still draw markets into bankruptcy, according to Bloomberg.
"The bankruptcy code needs to be reformed, in my view, to accommodate highly interconnected companies if they want to go through that process," Dodd told Bloomberg.
Dodd said that cutting regulators out of the bankruptcies would be a terrible idea, and maintained that lawmakers should resist calls to repeal the new law, the news source says. The lawmaker hopes that the decision will fall into the hands of the Senate Judiciary Committee, which he hopes will change the bankruptcy laws to eliminate "too big to fail" firms.
Dodd's tenure in office is set to end at the end of the year.
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