U.S. lawmakers have created a facility to wind down failing financial institutions. The government will use its newly legislated authority to prove that they are done with bailouts and win back investor confidence.
In order to prevent another financial crisis, the legislation will allow the U.S. government to liquidate failing firms. But skeptics doubt whether this new method will be able to address the problems of such institutions. The president of the Federal Bank of St. Louis says that the facility will gain credibility if it can be used successfully.