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Iceland put top finance executives behind bars, but fears of cronyism remain

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Re: Iceland put top finance executives behind bars, but fears of cronyism remain

#61

Post by [deleted] »

Shivetya wrote: post #37
deepnet wrote: post #16

Exactly, the problem has got worse. Banks are larger and more centralised, the offenders unpunished know they can act with impunity, legislation is unchanged. Banking/ finance types now know that if they are losing money they must simply lose big enough to trigger more bailouts and the taxpayer pays. This is despotic anti-capitalism: they keep the winnings and losses are generational debt on which they again profit.…

You are still free to join about credit unions, use local banks, and the like. You get bigger because of all the support persons your need to comply with regulations. The auditors alone can be very burdensome to smaller banks. They certainly don't try to grow large just to fail. I am not sure you understand the words you are using. Paying the poor is a calculated game where politicians try to find the point they won'…

[deleted]

Re: Iceland put top finance executives behind bars, but fears of cronyism remain

#62

Post by tremon »

arethuza wrote: post #21
pascalmemories wrote: post #13

Earlier quoted context omitted.

But he still has 24x7 police protection at levels similar to the Royal Family. His house was removed from Google Maps - which seems silly as you just look for the obscured house on the street (why do people do that???). UK bankers were arguably key to the creation and implosion of the worldwide banking system but are already back to obscene bonus levels and see the taxpayer bailouts as a just reward to ensure their o…

Well, I was being slightly sarcastic. NB I remember crossing George Street here in Edinburgh in early 2009, a familiar looking chap waited in his convertible Ferrari for me to cross. A few minutes afterwards I realised why he looked familiar.... quite brave being out in Edinburgh at that time in a convertible - for a lot of reasons not just the weather.

Well, I was being slightly sarcastic

There should be a special tag for recursive sarcasm.

Re: Iceland put top finance executives behind bars, but fears of cronyism remain

#63

Post by JumpCrisscross »

illumin8 wrote: post #52
deepnet wrote: post #16

Exactly, the problem has got worse. Banks are larger and more centralised, the offenders unpunished know they can act with impunity, legislation is unchanged. Banking/ finance types now know that if they are losing money they must simply lose big enough to trigger more bailouts and the taxpayer pays. This is despotic anti-capitalism: they keep the winnings and losses are generational debt on which they again profit.…

This can really be traced back to the repeal of Glass Steagal. After the great depression in the 30s, congress passed the Glass Steagal act, which put a firewall between investment banks and commercial banks. In other words, Wall Street investment banks could no longer gamble with customer deposits. This seems like common sense, and all of the financial problems actually occurred after Glass Steagal was repealed in t…

> This can really be traced back to the repeal of Glass Steagal

Can it? Because none of the banks who initially failed would have been firewalled by Glass-Steagal. Bear Stearns, Lehman Brothers, AIG...none of these were deposit-taking institutions.

The problem erupted from corn-fed mortgages, something Glass-Steagall wouldn't have saved us from. This isn't just my opinion. Most economists see Gramm-Leach-Bliley (the Act that repealed Glass-Steagall) as having had a minor effect, at most, on the 2008 financial crisis [1].

[1] http://www.npr.org/sections/thetwo-way/2015/10/14/448685233/...

Re: Iceland put top finance executives behind bars, but fears of cronyism remain

#64

Post by ktRolster »

illumin8 wrote: post #52
deepnet wrote: post #16

Exactly, the problem has got worse. Banks are larger and more centralised, the offenders unpunished know they can act with impunity, legislation is unchanged. Banking/ finance types now know that if they are losing money they must simply lose big enough to trigger more bailouts and the taxpayer pays. This is despotic anti-capitalism: they keep the winnings and losses are generational debt on which they again profit.…

This can really be traced back to the repeal of Glass Steagal. After the great depression in the 30s, congress passed the Glass Steagal act, which put a firewall between investment banks and commercial banks. In other words, Wall Street investment banks could no longer gamble with customer deposits. This seems like common sense, and all of the financial problems actually occurred after Glass Steagal was repealed in t…

  >This can really be traced back to the repeal of Glass Steagal.
The evidence against this hypothesis is that Canada did not have Glass Steagal (or legislation similar to it), and yet they were not harmed by the financial crisis nearly as much. The banks were smart enough to not invest so deeply in mortgage backed securities.

Re: Iceland put top finance executives behind bars, but fears of cronyism remain

#65

Post by cm2187 »

JumpCrisscross wrote: post #63
illumin8 wrote: post #52

Earlier quoted context omitted.

This can really be traced back to the repeal of Glass Steagal. After the great depression in the 30s, congress passed the Glass Steagal act, which put a firewall between investment banks and commercial banks. In other words, Wall Street investment banks could no longer gamble with customer deposits. This seems like common sense, and all of the financial problems actually occurred after Glass Steagal was repealed in t…

> This can really be traced back to the repeal of Glass Steagal Can it? Because none of the banks who initially failed would have been firewalled by Glass-Steagal. Bear Stearns, Lehman Brothers, AIG...none of these were deposit-taking institutions. The problem erupted from corn-fed mortgages, something Glass-Steagall wouldn't have saved us from. This isn't just my opinion. Most economists see Gramm-Leach-Bliley (the…

And if we look at the UK, all the banks that failed (RBS, HBOS, Northern Rock) failed because of their bad loans or over-reliance on short-term funding, not because of investment banking activities.

Re: Iceland put top finance executives behind bars, but fears of cronyism remain

#66

Post by ktRolster »

api wrote: post #55
deepnet wrote: post #16

Exactly, the problem has got worse. Banks are larger and more centralised, the offenders unpunished know they can act with impunity, legislation is unchanged. Banking/ finance types now know that if they are losing money they must simply lose big enough to trigger more bailouts and the taxpayer pays. This is despotic anti-capitalism: they keep the winnings and losses are generational debt on which they again profit.…

Funny that GWB got away with such a blatant bit of Keynesianism. A Democrat would be crucified. This is actually the pretty well known "only Nixon could go to China" effect.

Probably not, since Obama did the same thing (and Carter did too, for that matter).

Re: Iceland put top finance executives behind bars, but fears of cronyism remain

#67

Post by ageofwant »

Money is a social contract. Its core intention is to formalise the exchange of promises fundamentally based on trust. I trust you to honour your promise to me, thats why I accept this pile of colourful paper tokens for my precious cow.

Society, as we are used to, is dependant on this contract being honoured.

This system is currently so heavily laden with trust-sapping parasites that the host is verging on collapse.

Re: Iceland put top finance executives behind bars, but fears of cronyism remain

#68

Post by hownottowrite »

toomuchtodo wrote: post #46
hownottowrite wrote: post #45

Kviabryggja facilities: http://www.visir.is/fancy-facilities--icelandic-banker-heads...

Would you prefer we flog them in public? Prison accommodations need not be barbaric to punish.

Indeed. http://icelandreview.com/news/2015/11/10/riding-lessons-impr...

Re: Iceland put top finance executives behind bars, but fears of cronyism remain

#69

Post by ktRolster »

nickles wrote: post #51
jsprogrammer wrote: post #27

Earlier quoted context omitted.

OK, how was TARP not a gift?

TARP has yielded a $64.5B profit [0] for the government. It was a loan, not a gift. It should be noted that the financial bailout was profitable, while the auto bailout netted a $9.5B loss [1]. [0] https://projects.propublica.org/bailout/ [1] http://www.nytimes.com/2014/12/20/business/us-signals-end-of...

Of course, the way the banks paid back TARP is with money given to them through the quantitative easing programs......

Re: Iceland put top finance executives behind bars, but fears of cronyism remain

#70

Post by ktRolster »

emodendroket wrote: post #32
grabcocque wrote: post #7

Just to clarify, They were sent to prison for "market manipulation and fraud" which are crimes in many places, not just Iceland. They weren't sent to prison for being "bad bankers" which isn't a crime in Iceland or anywhere else.

The difference is that in the US, while it would have been possible to prosecute bankers under existing law after the 2008 meltdown, we did not.

I don't even care that we didn't prosecute them. I just wish they weren't bailed out by the government (aka my tax money) when they went under.

It's a free market: you make mistakes, you lose.

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