41–50 of 51 posts
I've thought for a long time - it doesn't matter if these banks broke the law - they tried to fly to high and broke a lot of citizens. I'm not a fan of government bailouts. But if it happens, they should split the bank up into smaller pieces; ban the management from working in the industry as management again, and give the new remaining company a bit of support to get going again. Bailouts shouldn't come without a pr…
A bail in is the power of the regulator to declare a bank non viable and to force losses on debt holders over a week end. This effectively auto-recapitalizes a bank without having the messy consequences of a bankruptcy, by forcing losses on creditors in the same fashion as a bankruptcy.
The article doesn't mention either that banks have more twice the amount of capital they held before the crisis and are required to hold massive amounts of liquid assets.
Earlier quoted context omitted.
Who went to jail for breaking the law?
In general, banks that break regulations don't result in people going to jail because individuals take action to avoid personal responsibility for anything. There are literally hundreds of thousands of pagers of them, nobody really understands them, and regulators decide which ones to take seriously according to the political winds of the day. At top banks a major purpose of the regulatory department is to make sure…
It's more to do with a lack of prosecutorial oversight and a lack of political will than a lack of laws being broken. If Obama wanted to, he could toss Sarbanes-Oxley at the bank executives - they wouldn't even have to prove that they knew about the fraudulent and criminal behavior underneath in order to make those charges stick.
The mere fact that they turned a blind eye would be enough to put them in an orange jumpsuit.
The regulators have been talking about getting tough for two years but still show no signs of actually doing it (typical Obama play). I doubt they will unless Bernie enters the white house. Obama's not going to risk his cushy retirement of paid speaking gigs at Goldman Sachs.
And, I can't help but delve one level deeper.
Who's money were the banks playing with? Pension funds, mutual funds... in other words, funds in which the ordinary taxpayer had his/her money.
Whom did the taxpayer bail out? His/her own money - which they "invested" in these funds/banks for safekeeping without sufficient knowledge of the risks.
Unfortunately, we haven't learned our lesson either. We still like to allow others to manage our money and risks for us.
Earlier quoted context omitted.
Seemed like a net win for the surviving banks with all the reduced competition, cheap real estate in default, and near 0% Fed rate. https://www.fdic.gov/bank/individual/failed/banklist.html
The banks loathe low rates.. They make most of their profits on interest margin which is greatly compressed in ZIRP environments.. Their margin is literally the lowest it's been since at least the early 1980's. [1] It's no surprise then that bankers are the ones clamoring loudest for interest rate hikes. Bill Gross, Lloyd Blankfein, Robert Shiller, insurance & pension execs are all begging Yellen to raise rates while…
I've thought for a long time - it doesn't matter if these banks broke the law - they tried to fly to high and broke a lot of citizens. I'm not a fan of government bailouts. But if it happens, they should split the bank up into smaller pieces; ban the management from working in the industry as management again, and give the new remaining company a bit of support to get going again. Bailouts shouldn't come without a pr…
I've thought for a long time - it doesn't matter if these banks broke the law - they tried to fly to high and broke a lot of citizens. I'm not a fan of government bailouts. But if it happens, they should split the bank up into smaller pieces; ban the management from working in the industry as management again, and give the new remaining company a bit of support to get going again. Bailouts shouldn't come without a pr…
That's basically how Sweden responded to their banking crisis.
Do you have any other suggested reading on how Sweden go about doing this?
The last sentence practically says it all: > The big banks have surely drawn a lesson from the crash and its aftermath: that in the end there is very little they will not get away with. and it tells the story of our societies failure and the total failure of our political systems. Maybe in the history books of the future, it will be written as the beginning of the downfall of our societies. But one thing is sure, the…
Much of what our government does is protect us against the consequences of our poor choices.
The last sentence practically says it all: > The big banks have surely drawn a lesson from the crash and its aftermath: that in the end there is very little they will not get away with. and it tells the story of our societies failure and the total failure of our political systems. Maybe in the history books of the future, it will be written as the beginning of the downfall of our societies. But one thing is sure, the…
And when the big crash comes, there will be enough time between the 2008 crisis and the next one for the general public to have no understanding of the context and causes. They will be unable to connect the dots. And in their confusion they will give the politicians carte blanche to solve it. The politicians will turn to those who gave them the most money, the banks and their lobbyists, the very people who are behind…
Today, the money has the power and the politicians are mere puppets of the money. And we are all busy to survive ourselves and don't see how humanity and the whole planet is killed by greed.