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America will soon see a wave of bank mergers?

economist.com

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Re: America will soon see a wave of bank mergers?

#31

Post by mjburgess »

passwordoops wrote: post #20

I've said it before, I'll say it again - "too big to fail" should be recast as "too big to exist" I'm not sure what the best solution is here, but making the big banks even bigger is not it. This is just going to make the banking system more concentrated and no concentrated market is good for anyone. Least of all because the past decade+ has set the precedent that the banks will be bailed out... If they're big enough

Well, I think we've discovered banking is a "public utility" -- things which are too big to fail.

Re: America will soon see a wave of bank mergers?

#32

Post by newswasboring »

mtlmtlmtlmtl wrote: post #21
wesapien wrote: post #16

Earlier quoted context omitted.

You guys should be flipping cars when bank execs didn't get jail time for the financial crisis

Well America has plenty of outrage, but they're utterly divided and most that outrage just goes into poopooing the other side, instead of something productive like real demonstrations and protests with a real purpose. Instead we get outrage protests mainly designed for extremist groups to waste their time fighting eachother and playing at civil war.

America needs a leader who can inspire people to work with each other even when they don't agree on everything. I am quite sure you can build a significant coalition around financial issues, maybe even bigger than a super majority. But somehow people are not willing to work with each other unless they pass each other's purity tests. Thus, nothing changes and the status quo wins every time.

Re: America will soon see a wave of bank mergers?

#33

Post by lp0_on_fire »

wesapien wrote: post #16
cyclecount wrote: post #2

All of the rules put in place after 2008 are being ignored; the number of banks in the US pre-2008 financial crisis was about 31k. Now there are close to 3000. After this wave of mergers, there might be around 1000! And a few will be so large that they can make insane bets, betting on risky and novel new investment vehicles that will (maybe initially) pay off handsomely before ultimately failing dramatically. This wi…

You guys should be flipping cars when bank execs didn't get jail time for the financial crisis

Occupy Wall Street was the beginning of that but the media and their allies in the government decided to push for a race war in the 2012 election. It’s not a coincidence the oppression Olympics were turned up to 11 at that time.

That’s not to say that there aren’t issues with race in America but they pale in comparison to the socioeconomic ones. A nation obsessed over race and culture has little time to confront other issues.

Re: America will soon see a wave of bank mergers?

#34

Post by nonethewiser »

brianmcc wrote: post #29
nonethewiser wrote: post #28

Earlier quoted context omitted.

> This is just going to make the banking system more concentrated More concentrated. More highly regulated. Closer to being absorbed by the state. I'm not saying that's necessarily going to happen someday. But that is the direction it is (and has been) moving.

Also closer to absorbing the state. I'm not a tin foil hat person, but corporations growing larger than nation states just doesn't seem remotely far fetched. Which corporation will be first to sit at the UN table?

But who is creating the regulation?

The answer to that is funny. It is literally the state, which is to my point, but it is also shaped by the banks, which is to your point.

Re: America will soon see a wave of bank mergers?

#35

Post by aqme28 »

passwordoops wrote: post #20

I've said it before, I'll say it again - "too big to fail" should be recast as "too big to exist" I'm not sure what the best solution is here, but making the big banks even bigger is not it. This is just going to make the banking system more concentrated and no concentrated market is good for anyone. Least of all because the past decade+ has set the precedent that the banks will be bailed out... If they're big enough

Yeah it seems obviously risky. A small bank gets a little insolvent and so it gets absorbed by a larger bank. This system works fine when there’s a larger bank to absorb them, but it’s obviously untenable. What happens when the largest bank needs saving?

Re: America will soon see a wave of bank mergers?

#36

Post by lobochrome »

passwordoops wrote: post #20

I've said it before, I'll say it again - "too big to fail" should be recast as "too big to exist" I'm not sure what the best solution is here, but making the big banks even bigger is not it. This is just going to make the banking system more concentrated and no concentrated market is good for anyone. Least of all because the past decade+ has set the precedent that the banks will be bailed out... If they're big enough

Fed accounts for everyone.

Re: America will soon see a wave of bank mergers?

#37

Post by capableweb »

nonethewiser wrote: post #28
passwordoops wrote: post #20

I've said it before, I'll say it again - "too big to fail" should be recast as "too big to exist" I'm not sure what the best solution is here, but making the big banks even bigger is not it. This is just going to make the banking system more concentrated and no concentrated market is good for anyone. Least of all because the past decade+ has set the precedent that the banks will be bailed out... If they're big enough

> This is just going to make the banking system more concentrated More concentrated. More highly regulated. Closer to being absorbed by the state. I'm not saying that's necessarily going to happen someday. But that is the direction it is (and has been) moving.

> Closer to being absorbed by the state.

Or the opposite.

Re: America will soon see a wave of bank mergers?

#38

Post by jmyeet »

Consider these three pieces of information:

1. There is not a bank in existence in the US that could survive a bank run where 25% or more of the deposits leave. Not even JP Morgan Chase; and

2. There's a lot of evidence to suggest that the bank run on SVB was created by the direct actions of relatively few people, most notably Peter Thiel; and

3. The FDIC usually solves such bank runs by seizing the bank and selling the bank for parts. The banks all actually have more assets than depositor funds. So far at least, all depositor funds have been protected through assets and the FDIC (side note: the FDIC is funded by banks and receives no appropriations from Congress). It's expected that these asset sales are at a significant discount (eg CSFB acquiring UBS for a song although that's Switzerland not hte US obviously).

So perhaps we should be asking if these bank runs are being deliberately created to profit from the collapse of smaller banks. In an ideal world, if true, people would end up in prison.

Re: America will soon see a wave of bank mergers?

#39

Post by prasadjoglekar »

wesapien wrote: post #16
cyclecount wrote: post #2

All of the rules put in place after 2008 are being ignored; the number of banks in the US pre-2008 financial crisis was about 31k. Now there are close to 3000. After this wave of mergers, there might be around 1000! And a few will be so large that they can make insane bets, betting on risky and novel new investment vehicles that will (maybe initially) pay off handsomely before ultimately failing dramatically. This wi…

You guys should be flipping cars when bank execs didn't get jail time for the financial crisis

That was what Occupy Wall St and Tea Party movements were. Remember that? Before each of them got infested with social-issue parasites of each pole, both were populist reactions to financial injustices.

Re: America will soon see a wave of bank mergers?

#40

Post by smeej »

Mistletoe wrote: post #4
cyclecount wrote: post #2

All of the rules put in place after 2008 are being ignored; the number of banks in the US pre-2008 financial crisis was about 31k. Now there are close to 3000. After this wave of mergers, there might be around 1000! And a few will be so large that they can make insane bets, betting on risky and novel new investment vehicles that will (maybe initially) pay off handsomely before ultimately failing dramatically. This wi…

Am I too tinfoil hat to think the big 4 planned it like this all along? I guess one could ask why WOULDN’T they have meetings trying to engineer exactly what is happening?

I'm willing to take my downvotes on this, but as someone who works in an industry that has been working for 14 years to set up an alternative to this system, and which feels like it's under systemic, engineered threat at the very same time this is happening, I think your tinfoil hat is stylish, and appropriate for the season and weather.
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