Assignment for Chapter Twenty-One Your text takes the time to talk about how and why banks and thrift operations failed. Thrifts fail for all the same reasons that banks are found to fail. List and explain the reasons given for their failure and how one might with good management keep from being impacted by these reasons. The first article below talks about why regulators are needed to keep the banking system safe and the second article on why that even with greater capital it will not override the other risks faced by banks that lead to failure. Use the articles to help you formulate your answer. This assignment should be saved as a Word document when submitted to your drop-box in D2L. Please remember to cite your work even if it is just the text. Why Regulators Are Needed to Handle Failed Banks By Mark J. Roe One of the major reforms to avoid the recurrence of the severity of the financial crisis was a set of mechanisms by which the regulators could wind down failed banks or restructure them if they were still viable. The House of Repcesentatives is set to vote to repeal this measure and replace it with a bankruptcy that only the bankers themselves could decide to enter. These are dangerous actions that can risk turning a tumultuous bank failure into a deep and full financial erisis, like that of the 2008-9 financial panic. Bankruptcy alone cannot handle a financial crisis emanating from collapsed banks. Adding a robust bankruptcy channel makes much sense. But repealing the regulatory-led sytem and replacing it with bankruptcy is unwise Replacing it with the narrow, limited bankruptcy structure moving forward in the House is exceedingly unwise, If the me eabank continues to sink, it could take down the economy with it. Lehman Brothers waited too long to file for bankruptcy in 2008 and ran out of cash. lts tesulting disordetly bankruptey seriously damaged the economy. The House bill's supporters trust the judgment of the failed bank executives over that of the United States to keep the economy steady. They seek to avoid a bailout but put considenable power into the hands of those it fears would be bailod out. Worse, in a broad financial crisis with many megabanks totering, the govemment's response needs to be coordinated and coherent Bankrupley judges cannot caucus and come up with a common policy. They cannot provide liquidity to the stumbling bank and neither can othe mepabanks becaure they would all be hoarding liquidity in a crisis Only the govermment can, and the only formal channel for it to do so is embedded in the regulatory-led restructuring mechanism For megabanks with global operations, American regulators need to coordinate actions with regulators abroad Even if the bankruptcy courts can quickly restructure a United States bank's failed American operations, creditors on the bank's London subsidaries might still run, taking down the United States operations no matter what the bankruptcy judge does Banknuptcy judges cannot coordinate a systemwide tesponse and to develop international understandings. That response needs staff and financial experience, which the regulators have