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Dave - unfortunately, it doesn't matter whether the swaps are "pushed out" or remain "in" under FDIC insurance. The US taxpayer is always implicitly on the hook for these products as long as they are part of the largest banks.

Even if "pushed out" into subsidiaries of the major banks, the banks are still ultimately (and legally) on the hook for the failures of their subsidiaries. And, if the failure of subsidiaries would create a solvency problem for any of the largest banks (which are the primary traders of these products), the government would once again have to bailout the largest banks - regardless of FDIC protection (as we saw in the last crisis with the AIG bailout).

Frankly, Warren is taking up the wrong cause and pointing fingers at the target du jour (Citibank) while notably ignoring the same issues at the other major banks (Bank of America, JP Morgan (ahem, Jamie Dimon), and Goldman).

The only real solution here is breaking up the banks into small enough entities where the failure of one isn't so catastrophic that it takes down all of its counterparties (i.e. other financial institutions).

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