More firms would require far more resources to operate. I think that is just a price we have to pay for reduced risk. Whether the risk decreases or not depends on the operating procedures of each of the individual banks. One would hope that with more smaller firms out there only the ones that operate in an overtly risky way will be the ones to go down in the event of a crash, whilst the not so risky ones would stay up. It's a complicated scenario because part of the reason the big firms got so big in the first place is because they were happy to take those risks!
The solution coming from within the banks is a nice angle I hadn't considered. The finance sector is vacuuming up the smartest college kids left right and center. I do think that the 'incentives' that you speak of may be as difficult to implement as an actual solution!
"Education is the only thing you can do that will change society. Everything else is just a band-aid." - Jacqueline de Chollet
"Boys will be boys. But boys will not be president." - Ronald Regan
and that's true about derivatives, they were legal ( so much for govt. experts knowing what they are doing, eh?).... and it should, among other things, make you ponder why deriviatives were invented in the first place.
I remember back in the 80's when they changed the rules to allow interstate banking. Now, apparently we want to go back to the old way. Personally, I think it is a good idea. I would make it optional, though. Change the FDIC rules to exclude interstate banks from deposit insurance. The banks can decide and, obviously, the net result will be fewer interstate banks. They talk about these banks being too big to fail. I think of them as too big to succeed.
I've read through his 12 point plan so I should know.
The GSEs were far more complicit in creating the Subprime mortgage crisis than any bank was.
They were the only two Financial entities investigated by the SEC for their involvement in misreporting their massive amounts of debt and profits
But I never hear leftist and or Sanders rail against their unprecedented level of corruption and thats mainly because they were run and protected by the Democrats.
Sanders is more of the same. Obama's destructive ideology on steroids and his policies would crater whats left of this already weak economy.
And Glass Steagal had little to do with the Subprime mortgage crisis.
2 years before it was passed Freddie. mac guaranteed 380 Million dollars in Subprime backed securities.
Last edited by Fenton; 05-06-15 at 04:09 PM.
Even warned of the systemic economic consequences that could arise from two massive Financial entities not being regulated thoroughly.
The Banks were bailed out and they paid it back.
Fannie and Freddie were declared insolvent, and the US took om 5 Trillion dollars of their worthless debt.
The US FED has taken on another 3 Trillion plus more.
So 750 Billion in TARP is paid bqck qnd Trillions in GSE securities and loans get piled onto the Treasury.
And not a word from Bernie about it. He's a Socialist, they have the priorities a little backwards.