A New Legislative Push to Reform the Federal Reserve: Introducing the “End the Fed’s Big Bank Bailout Act”
Washington D.C. – A new legislative proposal, officially designated as S. 2113 (IS) and published by GovInfo on July 2nd, 2025, has been introduced with the aim of fundamentally altering the Federal Reserve’s role in supporting large financial institutions. Titled the “End the Fed’s Big Bank Bailout Act,” this bill signals a renewed effort by lawmakers to prevent taxpayer-funded bailouts of major banks.
The legislation, filed as an “Introduced” bill, signifies the initial stage of the legislative process. It suggests a clear intent from its sponsors to address concerns surrounding the financial stability and the perceived systemic risk associated with large, interconnected banks. While the specific details of the bill’s provisions are not yet publicly available in their entirety on GovInfo, the title itself strongly indicates a focus on restricting or eliminating the Federal Reserve’s authority to provide direct financial assistance or emergency liquidity to these institutions during times of crisis.
The concept of “big bank bailouts” has been a recurring topic of debate in financial policy circles, particularly in the wake of the 2008 financial crisis. Many argue that such interventions create a moral hazard, where large institutions may take on excessive risk knowing that they could be rescued by government funds if their ventures fail. Proponents of legislation like the “End the Fed’s Big Bank Bailout Act” often advocate for market discipline and believe that the failure of large financial entities, while potentially disruptive, should be allowed to occur without public intervention to avoid the perceived unfairness and economic burden on taxpayers.
The introduction of S. 2113 (IS) suggests that a segment of Congress remains committed to exploring avenues for reform that could significantly reshape the operational landscape of the Federal Reserve and its relationship with the nation’s largest banks. Further analysis of the bill’s specific clauses will be crucial to understanding the proposed mechanisms for achieving its stated objectives and the potential implications for the broader financial system. As this legislation progresses through the legislative process, it is likely to generate considerable discussion and scrutiny from policymakers, financial industry stakeholders, and the public alike.
S. 2113 (IS) – End the Fed’s Big Bank Bailout Act
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