A related line of criticism holds that the orderly liquidation authority enshrines “too big to fail” and provides for taxpayer bailouts of systemically important firms through the orderly liquidation fund. However, under the Board’s proposed TLAC rule, a failed GSIB would be recapitalized by its private-sector long-term creditors (whose debt claims would be converted into equity), not by the government.
A useful test of a retirement system for a society is whether it sets up realistic expectations as to the future availability of real resources and, hence, the capacity to deliver postwork consumption without overly burdening the standard of living of the working-age population.