The Public Policy  Failing Successfully  Speed bankruptcy expert
Garett Jones on how to cure "too big to fail."  By 6.15.10  Send
to Kindle  Last week I had a chance to interview Garett Jones, a
professor of economics at George Mason University and the BB&T
Professor for the Study of Capitalism at the Mercatus Center, on
the pending financial regulation reform bills and the recent
financial crisis.  Earlier this year Jones wrote a paper,
published by Mercatus, that proposed an alternative to bailouts
and the financial regulation bills for dealing with troubled
banks: speed bankruptcy. The simplified idea behind speed
bankruptcies is that failing banks would be subjected to
procedures very similar to Chapter 11 bankruptcies, with
shareholders getting wiped out and bondholders becoming the new
shareholders. What would make these bankruptcies "speedy" is
that the terms for this procedure would be written into the
banks' bonds, meaning that during a crisis the bonds would
automatically convert to equity stakes in