Welcome to the PMBug forums - a watering hole for folks interested in gold, silver, precious metals, sound money, investing, market and economic news, central bank monetary policies, politics and more. You can visit the forum page to see the list of forum nodes (categories/rooms) for topics.
Why not register an account and join the discussions? When you register an account and log in, you may enjoy additional benefits including no Google ads, market data/charts, access to trade/barter with the community and much more. Registering an account is free - you have nothing to lose!
...
"We recommend that TBTF (too-big-to-fail) financial institutions be restructured into multiple business entities," Richard Fisher, president of the Dallas Federal Reserve Bank, told an audience at the National Press Club in Washington.
Critics say Dodd-Frank did not go far enough, including several Fed officials who, like Fisher, want the biggest banks reined in.
...
He identified 12 "megabanks" with assets of over $250 billion as too big to fail.
"Only the resulting downsized commercial banking operations, and not shadow banking affiliates or the parent company, would benefit from the safety net of federal deposit insurance and access to the Federal Reserve's discount window," Fisher said.
The 12 "megabanks" Fisher identified together account for 69 percent of all U.S. banking assets, but represent only 0.2 percent of the country's 5,600 banks.
"The 12 institutions ... are candidates to be considered TBTF because of the threat they could pose to the financial system and the economy should one or more of them get into trouble," he said.
He did not name them all, but showed a slide displaying the names of five top U.S. banks: JPMorgan Chase , Bank of America , Goldman Sachs , Citigroup and Morgan Stanley .
Fisher said he had received support from lawmakers on both sides of the aisle for his views, which the Dallas Fed has been pressing for over a year, and had even heard from famed dealmaker Sandy Weill, who said he agreed with Fisher.
All they truly have to do is to reinstate Glass Steagal with no new codicils or changes. If they leave it exactly as written originally, then enforce it with the full weight of already existing law, we will have separated banks from investment houses and hedge funds. Then, limit leverage to no more than 10 to 1.
Will it happen? Not a fucking chance.
Amid calls for stricter regulations of the banking industry, JP Morgan CEO Jamie Dimon came under fire Wednesday after telling corporate and political leaders at the World Economic Forum that banks had been wrongly "scapegoated" as the cause of the global economic crisis, and resisted calls for increased regulation of the financial industry.
Dimon's remarks on Wednesday—the first day of the WEF in Davos, Switzerland—came in response to comments by Min Zhu, deputy managing director of the IMF, who argued that the financial sector is too big and greater regulations—including of the "shadow banking" sector—are critical, The Guardian reports.
Sam Mamudi at Barrons writes, "This line of reasoning echoes that of Goldman Sachs CEO Lloyd Blankfein when he told the Times of London newspaper in late 2009 that his bank was 'doing God’s work.' It’s also nonsense, and it shows just how deeply inside their own bubble many bankers live these days."
...
(...) the government bails out the foolish banks and makes the taxpayers and better run banks pay for it. This actually reduces the incentive to be a conservative, well run bank(...)
That's correct, DCFusor, I can't give the details from my memory, but there were numerous examples of that (including JPMorgan's London Whale "rogue" trader(s), and at least some of MF Global shenanigans). Max Keiser is all over this, every now and again he gives examples, how London is the epicenter of global financial fraud.I seem to recall that all the TBTF US banks (and many others) have a London office so they can do things that aren't legal here - but are there, for just one example.
We recommend that TBTF (too-big-to-fail) financial institutions be restructured into multiple business entities," Richard Fisher, president of the Dallas Federal Reserve Bank, told an audience at the National Press Club in Washington.
DC,
The London thing exists because regulations there allow bankers to do things that are far riskier than they are in the US. Re-hypothecation is just one of them. In London, an asset can be pledged more than once to attain financing [read: cash money] to increase either cash basis or other funding pools. In addition, these assets need only be in their "custody", not their posessions. So, money that you think your broker is safeguarding in some conservative London managed fund, may be proomised as collateral elsewhere against a loan.
Richard Fisher, President and CEO of the Federal Reserve Bank of Dallas, presented trenchant, and important, remarks before Columbia University's School of International and Public Affairs on February 27, 2013.
.........
I have argued against what I have called “Buzz Lightyear” monetary policy—pledging to hold the federal funds rate at zero seemingly to infinity and beyond, while purchasing longer-term Treasury securities at a pace of $45 billion per month, reinvesting principal payments on all agency debt and agency mortgage-backed securities (MBS) and purchasing MBS at a pace of $40 billion per month.5 Indeed, other than our initial program to underpin a recovery in the housing market with our initial tranche of purchases of MBS, I have opposed all other large-scale asset purchases or quantitative easing (QE) programs. Why have I been so obstinate in my opposition to this well-intended program?
...
... when Santelli asks him about the Fed's exit that things get a little uncomfortable, "no central bank anywhere on the planet has the experience of successfully navigating a return home from the place in which we now find ourselves." When pressed he exposes the flaw (much to the chagrin of Kuroda and Bernanke we suspect), "somewhere we have to have practical limits as to where we can build the balance sheet. We're moving in the direction of a $4 trillion balance sheet. We know we can't go on forever."
...
...
Four experts recently faced off on this question in an Oxford-style debate for the Intelligence Squared U.S. series. They argued two against two on the motion, "Break Up The Big Banks."
Before the debate, the audience at New York City's Kaufman Center voted 37 percent in favor of the motion and 19 percent against. Forty-four percent were undecided. After the debate, 49 percent supported breaking up big banks — an increase of 12 percentage points — and 39 percent opposed — an increase of 20 points. That made the side arguing against breaking up the banks the winners of the debate.
Those debating:
FOR THE MOTION
Richard W. Fisher is the president and CEO of the Federal Reserve Bank of Dallas. ...
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?