241–250 of 451 posts
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
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
Was SVB too big to fail? Signature? Apparently!
TBTF is now a popular concept more than a legal one. We need explicit universal deposit insurance along with the rules that make that guarantee tenable. I also think experiments in narrow banking, e.g. permitting each state to charter a narrow bank open to its residents and guaranteed against losses (e.g. due to fraud) by its own treasury to access a special type of reserve account, need to commence.
Earlier quoted context omitted.
Banking is fundamentally broken. People want zero risk, demand deposits that pay interest. There’s no business model that can provide that. It would be perfectly possible for a business to provide zero risk demand deposits—-but the business would have to charge customers for its custodial operations rather than making money by writing loans. Of course because we live in times where no one can tell the people that wha…
> People want zero risk, demand deposits that pay interest. There’s no business model that can provide that. > It would be perfectly possible for a business to provide zero risk demand deposits—-but the business would have to charge customers for its custodial operations rather than making money by writing loans That was true when we lived with 0% interest rates. Now, there’s no reason why a narrow bank couldn’t take…
The Fed pays interest on those reserves to keep them from being lent. A narrow bank wouldn’t be able to lend its reserves. As such, it makes no sense for the Fed to pay interest on them.
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That’s not how the Fed interest rate works. Yo can’t just “deposit” your money with the Fed and have it pay you interest. What you can do is buy bonds. These bonds have a price and maturity date. When the interest rates keep increasing the bonds which pay less interest become cheaper. So you can’t just “withdraw” what you deposited. You have to sell what you “bought” but for much less than you paid, so you go under.
You can't. Banks can. https://www.newyorkfed.org/markets/reference-rates/obfr and things like that.
[1] https://www.federalreserve.gov/monetarypolicy/reserve-balanc...
The big banks are terrible if you fall outside their algorithmic expectation. My partner and I were trying to get a mortgage and despite near perfect credit, large incomes, etc our apps were auto-denied because I never opened multiple open loan lines. Never needed them, just used CCs I immediately paid off for points as I always had a job/savings and bought cheap used cars for cash. We eventually got one but it took…
never buy a mortgage through an app. use a human broker or if you're rich enough, a bank salesman. and for those of you who refuse to talk to people when spending multiple hundreds of thousands or even millions of dollars, well... this is what you get to deal with.
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In the US, a government-controlled bank would have stronger privacy because privacy is enshrined in law. Specifically my government cannot snoop on certain things. If the government kept all of my banking records, they wouldn't be able to legally access them. Currently, they can just use taxpayer money to purchase these records from the corporations who gather them.
Sorry, you must not be paying attention or this is sarcasm. Giving the government the keys to your banking data and expecting them to respect rights is naive. Government ownership of data means they don't have to respect privacy because they already own the data. The US government is wholesale spying on the entirety of electronic communications and working with social media sites to make some voices less prominent. P…
> Government ownership of data means they don't have to respect privacy because they already own the data.
> Banks exist as long as they are in the good graces of regulators.
So we have this problem that the government doesn't want to respect our privacy and the problem that the government doesn't need to respect our privacy and somehow removing the bank in the middle will mean that the government isn't respecting our privacy.
If the government is in control of the banks it will make it more obvious to the average citizen that the government has the ability to snoop on transaction information and it might be that such citizens decide to demand stricter privacy measures.
Back to this statement:
> Banks exist as long as they are in the good graces of regulators.
That's kinda my point. The governments run the banks in practice, just not in theory. Changing that "not in theory" part brings the understanding to the citizenry that they can demand certain things from their bank.
Earlier quoted context omitted.
Banking is fundamentally broken. People want zero risk, demand deposits that pay interest. There’s no business model that can provide that. It would be perfectly possible for a business to provide zero risk demand deposits—-but the business would have to charge customers for its custodial operations rather than making money by writing loans. Of course because we live in times where no one can tell the people that wha…
> People want zero risk, demand deposits that pay interest. There’s no business model that can provide that. > It would be perfectly possible for a business to provide zero risk demand deposits—-but the business would have to charge customers for its custodial operations rather than making money by writing loans That was true when we lived with 0% interest rates. Now, there’s no reason why a narrow bank couldn’t take…
If retail banks switched en mass to backing deposits 1-to-1 with Fed reserves then the Fed would quickly take strong action to disincentivise this strongly contractionary effect.
They have plenty of legal tools to do this (e.g. IORB rate). They don’t need to resort to not giving out licenses.
Earlier quoted context omitted.
Banking is fundamentally broken. People want zero risk, demand deposits that pay interest. There’s no business model that can provide that. It would be perfectly possible for a business to provide zero risk demand deposits—-but the business would have to charge customers for its custodial operations rather than making money by writing loans. Of course because we live in times where no one can tell the people that wha…
> Banking is fundamentally broken. People want zero risk, demand deposits that pay interest. There’s no business model that can provide that. Given that many people bank at gigantic banks that pay 0.00001% interest...I don't think that's true.
Personally I judge banks on their app and IT reliability.
Earlier quoted context omitted.
In the US, a government-controlled bank would have stronger privacy because privacy is enshrined in law. Specifically my government cannot snoop on certain things. If the government kept all of my banking records, they wouldn't be able to legally access them. Currently, they can just use taxpayer money to purchase these records from the corporations who gather them.
Sorry, you must not be paying attention or this is sarcasm. Giving the government the keys to your banking data and expecting them to respect rights is naive. Government ownership of data means they don't have to respect privacy because they already own the data. The US government is wholesale spying on the entirety of electronic communications and working with social media sites to make some voices less prominent. P…
Do they actually tell the government to pound sand, though? In the end, if I can only rely on the moral codes of for-profit companies who are weighing the value of a good relationship with me versus one with the US government, then I can't rely on much. But the government can and regularly does tell itself to go pound sand. Like the IRS, Census, or any agency with confidential medical records.
Also, your examples are of private companies selling data. The government is the buyer in those scenarios, not the guardian.
IMO, data is less likely to be shared between government agencies because rarely do both parties benefit. For a company, the database team wins when sales wins, as long as they get to present their success together. Government workers follow strict pay scales, get no bonuses, and have nearly guaranteed job security. They also have notoriously few ambitious ladder-climbers. It's hard enough to get them to share data with each other when it's legal and ethical. If there's any possibility sharing data would break rules, government will refuse to risk it.
Earlier quoted context omitted.
I’m sure all the spooks in the three letter agencies will totally keep their hands out of that cookie jar. All the commenters here that think the federal government should directly provide their banking services are going to be in for a rude awakening if it ever actually happens.
At least it would give a private citizen recourse if snooping did happen; it would become private by law. It is currently not. Maybe it all goes south and people are worse off with their privacy than now but I can't even imagine what "worse off" would be. The particular example you gave ("spooks in three letter agencies") currently happens and I can't exactly expect it to stop. How could it be worse?