Dodd-Frank is "ineffective" and "burdensome" Federal Reserve Bank of Dallas President Richard W. Fisher told Congress Wednesday, calling for a bi-partisan plan to end too big to fail.

"The effort crafted by Congress to correct the problems of TBTF - known as the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) - is, despite its best intentions, ineffective, burdensome, imposes a prohibitive cost burden on the non-TBTF banking institutions and needs to be amended. It is an example of the triumph of hope over experience," Fisher said, according to prepared text of his testimony before the House Committee on Financial Services.

While "a well-intentioned response to the problem," Dodd-Frank's "stated promise to end too big to fail rings hollow," he said. "Running 849 pages and with more than 9,000 pages of regulations written so far to implement it, Dodd-Frank is long on process and complexity but short on results. Consequently, nearly three years after Dodd-Frank was signed into law, very little positive reform has been implemented."

Calling for simplicity, Fisher said, "Regulators cannot enforce rules that are not easily understood. Nor can they enforce these rules without creating armies of new supervisors."

Conceding his plan "doesn't have all the answers either," Fisher proposed a three-pronged approached to TBTF: rolling back the safety net (deposit insurance and the Federal Reserve's discount window) to be used only by "traditional commercial banks"; asking "customers, creditors and counterparties of all nonbank affiliates and the parent holding companies would sign a simple, legally binding, unambiguous disclosure acknowledging and accepting that there is no government guarantee - ever - backstopping their investment"; and restructuring the largest financial holding companies to allow "a speedy bankruptcy process, and in the case of the banking entities themselves, that they become an appropriate size, complexity and geographic footprint that is 'too small to save.'"

Higher capital requirements and giving Dodd-Frank more time "fall short of necessary action," Fisher said. "Living wills and higher capital requirements are potentially very helpful tools but are not sufficient to ensure the survival of a company, and they will not eliminate massive losses that can choke off liquidity and disrupt financial markets and the economy."

He said that his proposal "would not eliminate financial crises-that would be an impossible or even foolish goal-but it should reduce their frequency and severity."

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