Nope they will act like zombies and drag the economy down for years to come because the administration refuses to structurally fix the system.
Quote:
President Barack Obama pledged on Monday “to put an end to the idea that some firms are ‘too big to fail.’” Though he outlined some worthy prescriptions, he failed to face up to the very size and power of the financial institutions that makes “too big to fail” possible.
For the big have gotten even bigger since the start of the financial crisis. At the end of 2007, the Big Four banks — Citigroup, JPMorgan Chase, Bank of America and Wells Fargo — held 32 percent of all deposits in FDIC-insured institutions. As of June 30th, it was 39 percent.
In total, they had $3.8 trillion worth of deposits as of June 30th. Compare that figure to the FDIC’s Deposit Insurance Fund, which showed a balance of just $10.4 billion on the same date.
The FDIC has been the most effective regulator since the onset of the crisis, closing down failed banks in order to limit risk to taxpayers. But its resources are woefully inadequate to deal with the largest institutions. (I am excluding the $500 billion credit line it has at Treasury; those are taxpayers’ resources, not FDIC’s.)
And that’s just the commercial banking side. These banks — especially Citigroup, Chase and Bank of America — have huge investment banking operations that are maddeningly complex and, systemically-speaking, very dangerous.
Obama certainly recognizes the problem — “the system as a whole isn’t safe until it is safe from the failure of any individual institution.”
But his recommendations — more stringent capital requirements, stronger rules and a “resolution authority” to cope with systemic meltdowns — won’t solve it once and for all.
"There's been a significant consolidation among the big banks, and it's kind of hollowing out the banking system," said Mark Zandi, chief economist of Moody's Economy.com. "You'll be left with very large institutions and small ones that fill in the cracks. But it'll be difficult for the mid-tier institutions to thrive."
Writing in the New York Times today, Joe Nocera sums up, “If Mr. Obama hopes to create a regulatory environment that stands for another six decades, he is going to have to do what Roosevelt did once upon a time. He is going to have make some bankers mad.”
Good point – but Nocera is thinking about the wrong Roosevelt (FDR)
In order to get to the point where you can reform like FDR, you first have to break the political power of the big banks, and that requires substantially reducing their economic power - the moment calls more for Teddy Roosevelt-type trustbusting...
Coward! It's amusing watching you offer nothing other than ridicule to other people's threads and posts. I hope you had a good night dreaming of banging sheep...
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~Freedom is the right to tell people what they don't want to hear
"I cannot teach anybody anything. I can only make them think." ~Socrates
Kakistocracy- Government by the least qualified or most unprincipled citizens.
"The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails."
-William Arthur Ward
Coward! It's amusing watching you offer nothing other than ridicule to other people's threads and posts. I hope you had a good night dreaming of banging sheep...
After smoking dope for most of his life, what would you expect out of the dolt? Look at his post, he lives in the land of make believe with Mr Rogers.
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Joe Biden: ‘We Have to Go Spend Money to Keep From Going Bankrupt’ Nacy Pelosi:
those attending health care town hall meetings are "carrying swastikas." HOPE & CHANGE
I'm betting 500 shares of C (literally) that the government continues to coddle Citi back to life and it becomes a deposit-sucking organism once more. I bought it at $4.00
It's only a $2,000 bet.
If C shoots back up to pre-crisis levels I'll have some money for a fabulous vacation with 1st class airfare.
Why Consolidation in the Banking Industry Threatens Our Economy
