US Banks Told To Make Plans For Preventing Collapse - Reuters

This could be nothing more than filing of paperwork but it caught my eye. Considering what happened before the last presidential election I'm probalby being overly paranoid but then again. The only part that really conerns me is that Reuters had to file a FOIA request to get the information

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John.NoseTip said:

This could be nothing more than filing of paperwork but it caught my eye. Considering what happened before the last presidential election I'm probalby being overly paranoid but then again. The only part that really conerns me is that Reuters had to file a FOIA request to get the information

Article

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Seems we always fight the last war. Seems like a self defeating exercise as banks would have to know what area caused them to fail. If they knew that they could probably get out of the way.

John.NoseTip said:

This could be nothing more than filing of paperwork but it caught my eye. Considering what happened before the last presidential election I'm probalby being overly paranoid but then again. The only part that really conerns me is that Reuters had to file a FOIA request to get the information

Article

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I think large banks should be broken up because there should be no such as too big to fail.

U.S. regulators directed five of the country's biggest banks, including Bank of America Corp and Goldman Sachs Group Inc, to develop plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count on government help

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The thing I would wonder about would be the role of FDIC for individual depositors. Does this mean that our deposits are no longer insured by the FDIC for up to $100,000? If not, I think we should be informed of this. There is nothing in the article that answers this question.

One would think banks would have a plan in place to prevent collapse anyway. They would fare far better without government regulations dictating to whom they must lend money.

So is it back to the old days that the Obama clan doesn't want, which includes more rigid lending practices like 20% down for home purchases? Or is it more of the same old "everybody deserves to live in their own home" ineffective practices the government got us into into troubled with in first place?

Britain was telling our banks to do this years ago, and that was too late anyway, what took so long?

jamesrage said:

I think large banks should be broken up because there should be no such as too big to fail.

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:clap:

I would add that specifically investment banks should be broken off from traditional (FDIC) banks; this somewhat recent invention has totally destabilized the financial industry with simply mind boggling risk/leverage.

John.NoseTip said:

This could be nothing more than filing of paperwork but it caught my eye. Considering what happened before the last presidential election I'm probalby being overly paranoid but then again. The only part that really conerns me is that Reuters had to file a FOIA request to get the information

Article

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After reading the article, I see it as common sense contingency planning -- something that apparently didn't exist during the 2008 crash.

Sure, NOW they should prepare to prevent collapse. Maybe I should start training for the 2004 Olympics NOW...

Why would they prepare? They've got a great racket going. Do whatever they want, beg for a bailout when it all goes wrong. Doesn't matter which party is in power, they'll get their bailout.

Karl said:

After reading the article, I see it as common sense contingency planning -- something that apparently didn't exist during the 2008 crash.

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I really hope your are right but when I see things like the item below and the libor issues I don't feel confident that the system isn't still sitting on a house of cards

John.NoseTip said:

I really hope your are right but when I see things like the item below and the libor issues I don't feel confident that the system isn't still sitting on a house of cards

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The LIBOR deal doesn't scare me (price fixing... yawn) but I agree that we're sitting on a house of cards with all the ultra-leveraged derivatives still floating around out there... what is it, $70 trillion? Staggering. While Obama recently signed some reforms into law (which Republicans will probably try to repeal, right after ObamaCare), they really don't unwind the conglomerate monster that has been spawned with the merger of investment banks with commercial banks... it's only a matter of time until the whole thing blows up, even worse than last time.

There -- that should help you sleep better

The LIBOR deal doesn't scare me (price fixing... yawn) but I agree that we're sitting on a house of cards with all the ultra-leveraged derivatives still floating around out there... what is it, $70 trillion? Staggering. While Obama recently signed some reforms into law (which Republicans will probably try to repeal, right after ObamaCare), they really don't unwind the conglomerate monster that has been spawned with the merger of investment banks with commercial banks... it's only a matter of time until the whole thing blows up, even worse than last time.

There -- that should help you sleep better

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I'm usually the pessimist in most of the discussions I've had on this forum. The main thing that concerns me about libor is all the interest rate swaps. I'm concerned that most of the "banks" sold the swaps based on the knowledge that the system was rigged therefore they incurred much more liablility than they can repay if we get a true rate. It reminds me of the idea that real estate always rises so we don't need to back these instruments with real capital. Also, the banks are going to be carpet bombed with large lawsuits based on those swaps. If just the local governments they screwed over sue I'm not sure they can afford it. I do agree the main problem is the merger of banking interest and neither candidate is going to change that. Hell Dodd-Frank still isn't implemented and it was mild compared to what is needed. Actually there's a great speech Bernie Sanders made a couple of years ago where he talks about how the implementation of Dodd-Frank will be slow rolled and hit the nail on the head with that one. If he would've called out Obama for hiring Larry Summers then it would be one of the best speeches I've ever heard. It's still great he just stopped short.

The plan before 2008 was adequate. You fail, you go out of business.

John.NoseTip said:

I'm usually the pessimist in most of the discussions I've had on this forum. The main thing that concerns me about libor is all the interest rate swaps. I'm concerned that most of the "banks" sold the swaps based on the knowledge that the system was rigged therefore they incurred much more liablility than they can repay if we get a true rate. [...]

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Oh. That's beyond any understand of I have of the issue; I am only vaguely aware that they were rigging the rate. Repercussions from any derivatives based upon those rates is a whole 'nother ballgame

Fishstyx said:

The plan before 2008 was adequate. You fail, you go out of business.

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That's a nice plan for children, which is why they invented adults.

Karl said:

That's a nice plan for children, which is why they invented adults.

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So, gonna actually rebut what I said or just reply with what you think is a witty comment?

Is Lehman Brothers still around? How about Washington Mutual? Wells Fargo?

What I said worked for them, why not the rest? The large fall, the smaller and mediums move up. Not rocket science.

Instead, we have finance reform that not only solidifies "too big to fail" but makes harder for the smaller and medium financial institutions to come through and compete. There are plenty that did not get caught up in the subprime mortgage securities and derivatives BS that now find themselves in jeopardy due to the Dodd-Frank asset to risk requirements that pretty much only the larger financial institutions can easily manage.

Adult enough for you?:roll:

I get so sick of the morally hazardous, central banking system we have.

Fishstyx said:

So, gonna actually rebut what I said or just reply with what you think is a witty comment?

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I like to think that wit is my strong suit; being smart is nothing particularly special where I come from :mrgreen:

But to answer your question, I gave your post all the rebuttal it merited. More, actually, since it merited no response at all. However, since you've belatedly decided to add some substance:

Fishstyx said:

Is Lehman Brothers still around? How about Washington Mutual? Wells Fargo?

What I said worked for them, why not the rest? The large fall, the smaller and mediums move up. Not rocket science.

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That's a nice argument for children; that's why they invented adults.

Fishstyx said:

Instead, we have finance reform that not only solidifies "too big to fail" but makes harder for the smaller and medium financial institutions to come through and compete. There are plenty that did not get caught up in the subprime mortgage securities and derivatives BS that now find themselves in jeopardy due to the Dodd-Frank asset to risk requirements that pretty much only the larger financial institutions can easily manage.

Adult enough for you?:roll:

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I will agree that finance reform did not address "too big to fail", and I see that as a glaring shortcoming; as to solidifying it, you'll need to present some type of argument to that effect. As to the margin requirements I am unfamiliar with those (other than being aware that they have been raised) and you did not deign to offer any specifics, so I therefore will not deign to do your homework.

No. But it is an improvement.