In the words of Sheila Bair, the departing chairman of the Federal Deposit Insurance Corp., the era of too-big-to-fail banks isn’t just ending — it’s already over. Consider her statement two weeks ago, in anews release heralding the creation of a committee to advise the agency on how to deal with large, dying financial firms:

“Congress has given the FDIC a tremendous amount of responsibility to ensure that financial organizations formerly deemed too big to fail will no longer receive taxpayer funded bailouts.”

Maybe Bair didn’t express herself clearly or was giving voice to her inner hopes. Either way, it’s hard to believe she convinced anyone that the government wouldn’t rescue Bank of America Corp., Citigroup Inc. (C), Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM)and Morgan Stanley (MS) — to name just a few — amid a crisis that threatened to take down the global financial system.

The basis for Bair’s assertion rests in the FDIC’s new powers under the Dodd-Frank Actpassed by Congress last year. The act, it’s worth noting, didn’t even pretend to end too big to fail at Fannie Mae or Freddie Mac, both of which are in government conservatorship almost three years after they were seized, or American International Group Inc. (AIG), which is still majority-owned by the Treasury Department.

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