Timothy Geithner Proposes Failed Bank Fund

One of the things that has come out of the global financial crisis is a certain level of populist rage at the bank bailouts and the efforts made to avoid the failure of big banks. In order to put some of the cost of failure back on the large financial institutions, U.S. Treasury Secretary Timothy Geithner is planning to propose a risk fund that would be backed by big banks.

The idea behind the risk fund is that big banks would fund it, and then it would be used to help cover bank losses and insure against failures. This way, the reasoning goes, there would be less burden on the taxpayers to cover losses incurred by banks. CNN Money reports on Geithner's remarks about a bank fund:

"Our judgment is that it needs to be a separate solution where the burden of funding ... (is) borne by the large institutions in a level proportionate to their size," he told a meeting of community bankers.

With the U.S. stock market down again today -- in spite of insistence by Geithner that economic recovery is beginning -- it is little surprise that efforts are being made to propose some protection to the system. However, it remains to be seen whether or not Wall Street likes the idea of providing its own insurance against failure.