FORTUNE -- Have you ever watched something unfold, knowing that it hasn't got a prayer of succeeding?
Then you understand how I feel about the provision in the Dodd-Frank financial reform legislation that would supposedly avoid future federal bailouts by requiring giant financial institutions to draw up so-called living wills.
These "wills," which banks are currently discussing informally with regulators, are a weak, pathetic substitute for what Washington should have really done: that is, break up "systemically important financial institutions" into much smaller pieces. Or segregate their federally-insured-deposit parts from risky things like creating and trading derivatives. Instead, we have living wills. Translated into English, this means that giant institutions create contingency plans for regulators to break them up or liquidate them in a crisis without any cost to taxpayers. And without the Federal Reserve providing any financing to make the deals work.
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