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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?

#71

Post by thehappypm »

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…

I have trouble following this logic. Monopolies are obviously bad, but, 1000 banks sounds like an extremely diverse ecosystem.

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

#72

Post by __MatrixMan__ »

aqme28 wrote: post #35
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?

People stop accepting dollars. It's about time for something new anyway.

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

#73

Post by aqme28 »

ImHereToVote wrote: post #47
aqme28 wrote: post #35

Earlier quoted context omitted.

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?

Robin Williams had a fairly accurate depiction of what happens. https://www.youtube.com/watch?v=etQeFJ2lbbo

Feels more like this Futurama bit: https://youtu.be/0SYpUSjSgFg?t=66

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

#74

Post by mtlmtlmtlmtl »

newswasboring wrote: post #67
mtlmtlmtlmtl wrote: post #66

Earlier quoted context omitted.

And what's the situation now? Your country could gradually he heading towards a two party system.

No we are heading to a one party system. But that has nothing to do with first past the post. There are several historical and social reasons for that.

I'm sorry to hear that. No one wants to live under a one-party system.

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

#75

Post by gorbachev »

newswasboring wrote: post #52
gorbachev wrote: post #46

Earlier quoted context omitted.

That will never happen in our lifetime. Democrats can't do it, because Republicans will never cooperate with a Democratic Party president. Republicans can't do it, because they will continue to nominate a culture warrior whose only job is to fight wokeness, so they aren't even interested in it. This thing will keep escalating, relatively slowly, until it finally crosses the line and even the Republicans will figure o…

I agree, if this was to happen it will have to happen with a third party. But America seems to be allergic to any third parties. For the longest time I used to think that the two party system is like a law in America or something. Like China has a one party system. When I learned that it isn't, i spent a considerable amount of time confused as to why then in all political discourse is the two party system so... enshr…

[flagged]

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

#76

Post by allie1 »

lvl102 wrote: post #45

People simply got used to not getting paid interest for their deposits. Bank business model needs to change or there will be new business models where deposits are fully guaranteed. That’s probably what the crypto people should have done but sadly they are too stupid (and greedy/scammy) to take on the traditional model.

There are exceptions.

Ally bank has been paying reasonable yields on deposits, being a digital bank with lower operating costs.

The bank model works, it’s the “too big to fail” model that is broke.

The one upside of TBTF banks is you forfeit any deposit earnings to get “insurance” on the full amount.

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

#77

Post by bullfightonmars »

aqme28 wrote: post #73
ImHereToVote wrote: post #47

Earlier quoted context omitted.

Robin Williams had a fairly accurate depiction of what happens. https://www.youtube.com/watch?v=etQeFJ2lbbo

Feels more like this Futurama bit: https://youtu.be/0SYpUSjSgFg?t=66

> Just like daddy puts in his drink every morning ... and then he gets mad.

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

#79

Post by RestlessMind »

nonethewiser wrote: post #34
brianmcc wrote: post #29

Earlier quoted context omitted.

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.

> But who is creating the regulation?

You know who writes our laws? Lobbyists. Politicians are not the ones drafting the bill. They merely take the drafts produced by lobbyists and then pass them.

Do you also know who runs various government agencies tasked with regulating different sectors? Again, it is a revolving door for private sector execs.

> It is literally the state

True, but the state is, to a large extent, influenced by corporations.

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

#80

Post by gonzo41 »

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

Kinda makes sense for the government open a commonwealth bank of sorts and allow people to hold deposits against the government directly. Cut's out a layer of rent seeking markets.
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