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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?

#271

Post by germinalphrase »

throwway120385 wrote: post #99
sclarisse wrote: post #90

Earlier quoted context omitted.

No, they’ll be replaced by something like The People’s Ledger, as proposed by Comptroller of the Currency nominee, Saule Omarova, in her paper of the same name. (She was nominated by President Biden in 2021. Not just a random kook!) Under such a regime all banks will put customer funds at the Fed, which will be the sole entity to allocate credit, with banks as mere customer service frontends. It will use that power t…

I would actually be fine with this if the mandate is simply to hold deposits and lend deposits with appropriate risk controls. But if the goal is to use that control to accomplish political ends like suppressing wage growth or providing stimulus then I don't think it's a good idea. If the Treasury wants a loan from the Fed to do these things that should be how it's done. Student Loan forgiveness is another thing enti…

“ if you teach at a public school for more than 5 years”

That’s fairly misleading. It’s only a relatively small sub-set of public school teachers who are eligible.

The TCLI Directory can be found here: https://studentaid.gov/tcli/directory-search

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

#272

Post by omgomgomgomg »

lcnPylGDnU4H9OF wrote: post #263
lockhouse wrote: post #250

Earlier quoted context omitted.

I’m curious, what recourse do you or anyone else have against the CIA, FBI, or any other Department of Justice or Intelligence agency that you wouldn’t also have with a commercial bank?

The commercial bank has something called a "privacy policy" in which they explain that they will choose not to respect my privacy. A government entity isn't allowed to do that. There are actually stricter laws for government invasions of privacy than corporate. To your concern that these three-letter spooks will spy on you: what would they do that they're not already doing? That isn't to excuse the spying; I'm just p…

So are ypu saying the constitution and its privacy protections are totally useless?

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

#273

Post by beiller »

lxgr wrote: post #116
beiller wrote: post #82

Earlier quoted context omitted.

The government controls the amount of dollars. It's not paying back out of coffers, just print the money. But if you really want to, you could cover the deposits from FDIC which is insurance paid by that bank. Secondly we're not bailing out banks. We'd be bailing out the depositors. The banks and their stock is free to go to zero, everyone is fired, etc. I think you've conflated two different things.

So you're suggesting we should let commercial banks run as risky a business as they like, pocket the profits if it works out, and pay for the deficits using newly printed central bank money if it doesn't? > The banks and their stock is free to go to zero, Sure, but what about the dividends and bonuses already paid out from the times it worked out in the risky banks' favor? You're suggesting a government/central bank…

Well maybe we can claw back the bonuses. You're right and I did think a bit on that after writing the comment. But there should be a clear incentive still to not go bankrupt and make their shares they hold worthless. With or without making depositors whole via ramping up the printer, your scenario still would make sense since even without the Fed backing, they could still just walk away couldn't they. The depositors would be left to sue to return the funds no? I've seen some good arguments to cover 100% of the deposits, but actually _regulate_ the banks instead of allowing their yolo fest.

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

#274

Post by ChadNauseam »

throwway120385 wrote: post #99
sclarisse wrote: post #90

Earlier quoted context omitted.

No, they’ll be replaced by something like The People’s Ledger, as proposed by Comptroller of the Currency nominee, Saule Omarova, in her paper of the same name. (She was nominated by President Biden in 2021. Not just a random kook!) Under such a regime all banks will put customer funds at the Fed, which will be the sole entity to allocate credit, with banks as mere customer service frontends. It will use that power t…

I would actually be fine with this if the mandate is simply to hold deposits and lend deposits with appropriate risk controls. But if the goal is to use that control to accomplish political ends like suppressing wage growth or providing stimulus then I don't think it's a good idea. If the Treasury wants a loan from the Fed to do these things that should be how it's done. Student Loan forgiveness is another thing enti…

> Student loans are also statutorily impossible to discharge in bankruptcy, unlike every other form of debt.

If this weren't the case, student loans would just not be offered to anyone not deemed creditworthy. (Or they would only be offered by the government, who would offer them expecting to lose their money.)

I think this would probably be a good thing, since easy access to student loans is probably related to why college has gotten so expensive, but the first-order implications of changing this policy are pretty detrimental to poor people.

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

#275

Post by akira2501 »

bradleyjg wrote: post #92
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

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…

> There’s no business model that can provide that.

They used to. So.. what changed?

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

#276

Post by sclarisse »

no_wizard wrote: post #229
sclarisse wrote: post #90

Earlier quoted context omitted.

No, they’ll be replaced by something like The People’s Ledger, as proposed by Comptroller of the Currency nominee, Saule Omarova, in her paper of the same name. (She was nominated by President Biden in 2021. Not just a random kook!) Under such a regime all banks will put customer funds at the Fed, which will be the sole entity to allocate credit, with banks as mere customer service frontends. It will use that power t…

This is not at all how I understood the paper. It was to allocate consumer funds directly with the Fed to prevent bank runs from restricting access to cash on hand for consumers. They just move spigots to different institutions this way. Nominally, this is what the proposal is all about. I didn't see anything about the Federal Reserve or the Government being able to access that money on a 1:10 basis or any other rese…

Specific phrases many people will read as political allocation of capital:

“Most objections to allowing significant quantitative growth of central bank balance sheets, in fact, reflect the underlying concerns about the qualitative, compositional aspects of such growth. Ultimately, however, these concerns are rarely substantiated by reference to anything more specific than deeply internalized skepticism toward the government as an economic actor. By contrast, this Article views the proposed change in the Fed’s liabilities as an opportunity to augment both (1) its ability to modulate credit-money supply more effectively, and (2) its potential to facilitate the more efficient allocation of that supply to productive enterprise.”

“the NIA would transact directly in private financial markets, proactively channeling public and private financial resources into large-scale, transformative public infrastructure projects. Importantly, however, it would reverse the familiar pattern of “public capital, private management” typical of most modern “public-private partnerships” in favor of the “public management, mixed public-and-private capital” model.”

Transformative infrastructure projects!! Are there any of those we’ve embarked on recently where the government’s proven more skilled at identifying investment opportunities than the market? Like, say, California high speed rail? What kind of returns is that investment earning? … oh.

It’s true they didn’t get all the way to mortgage forgiveness in the paper, but, well, it doesn’t seem much of a stretch, particularly when Housing Is A Human Right (tm). We could call it infrastructure, in the same sense that “elder care is infrastructure” — I seem to recall recent legislative campaigns about that and other social spending.

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

#277

Post by ChadNauseam »

JumpCrisscross wrote: post #242
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

> "too big to fail" should be recast as "too big to exist" 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 t…

SVB did fail, with basically no repercussions to the economy as a whole. Under what interpretation was it too big to fail?

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

#278

Post by wesapien »

l3mure wrote: post #233
lp0_on_fire wrote: post #33

Earlier quoted context omitted.

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 othe…

Race is the modality by which class is primarily expressed in America. There is no way to resolve socioeconomic problems without dealing with race at the same time, clearly demonstrated multiple times in US history. The failure of Reconstruction -- an "Unfinished Revolution" as Eric Foner puts it -- was precisely white workers' rejection of class solidarity with Black workers in favor of post-war white racial reconci…

Crab mentality and revenge seeking will keep people from true progress. We need to crush the idea of victim hood as a privilege.

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

#279

Post by akira2501 »

ehvatum wrote: post #128
skeeter2020 wrote: post #120

Earlier quoted context omitted.

Well you now have JP Morgan Chase with almost 2.5 TRILLION dollars in deposits, and the current regulators have essentially punted on this issue to the next administration. If they have a liquidity crisis the western world will essentially end.

> If they have a liquidity crisis the western world will essentially end. Already had one in 2008. Thankfully, our currency’s value is notional and the fed can print more until such time as the bank run ends.

> Thankfully, our currency’s value is notional and the fed can print more until such time as the bank run ends.

It's value is not notional. If you make more currency then all currency in circulation now has less value. "Quantitative Easing" is simply a way of taxing you after the fact.

Worse still if bonds are involved. Now it's a way of taxing your children before they're even born.

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

#280

Post by bradleyjg »

JumpCrisscross wrote: post #243
oarsinsync wrote: post #113

Earlier quoted context omitted.

> 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…

> stick them in with the fed providing 4% interest 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.

Increasingly banks are only lending to a different parts of the federal government anyway-—deploying their cash on treasuries and agency debt. They are being driven to this by the risk weighted capital adequacy requirements.

The whole thing resembles an ever more intricate Rube Goldberg machine.

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