Fed’s Hoenig outlines resolution schema for too-big-to-fail

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Thomas Hoenig, the president of the Kansas City Federal Reserve, and two of the Fed's economists have proposed a legal fix to the too-big-to-fail problem.

The remedy, published late Tuesday, would leave creditors bearing some of the costs of failure and would place the Federal Deposit Insurance Corporation (FDIC), which already handles the resolution of commercial banks, in charge of resolving all financial institutions deemed to have failed by their regulator.

Once an institution failed, the FD

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