Bernie And The Banks

BG9

Apr 15, 2016 at 7:04am

ctrzaska said:

BG9 said:

nan said:

This just in:

'Living Wills’ of 5 Banks Fail to Pass Muster

http://www.nytimes.com/2016/04/14/business/dealbook/living-wills-of-5-banks-fail-to-pass-muster.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0

Big bank arrogance. We're big, we're not going to fail and if by some miracle things do go south even if we think it can't happen, government will bail us.

So why bother with a "real" living will.

It has nothing to do with arrogance.

Beg to differ.

I worked in retail home banking (the online stuff) as a MD. Then I retired and rejoined as a consultant. The arrogance is we cannot be allowed to fail for we are the economy which will fail if we do.

Tom_Reingold

Apr 15, 2016 at 7:09am

mjh said:

I quoted what you said and responded to it. You asked for information and I tried to give you some. Sorry if you don't want to read it.

Nowhere did I say I don't want to read, nor did I imply it with words or my behavior. I don't see you quoting me complaining that nothing has changed. If you can find the text, please point me to it. I believe you are mistaken, but maybe I really did say that somewhere.

ctrzaska

Apr 15, 2016 at 6:45pm

BG9 said:

ctrzaska said:

BG9 said:

nan said:

This just in:

'Living Wills’ of 5 Banks Fail to Pass Muster

http://www.nytimes.com/2016/04/14/business/dealbook/living-wills-of-5-banks-fail-to-pass-muster.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0

Big bank arrogance. We're big, we're not going to fail and if by some miracle things do go south even if we think it can't happen, government will bail us.

So why bother with a "real" living will.

It has nothing to do with arrogance.

Beg to differ.

I worked in retail home banking (the online stuff) as a MD. Then I retired and rejoined as a consultant. The arrogance is we cannot be allowed to fail for we are the economy which will fail if we do.

At the time I worked (and still do) on the ORC side with one foot often in the FO. While I was probably too matter-of-fact in saying it has nothing to do with arrogance, I do think there is a difference in mindset now than 8 years ago. And it's not always arrogance that holds that if the big banks were to fail (globally, as in 08 I was at DB trying to find overnight homes for TARP money that banks didn't want and couldn't use, amongst other things) that the economy would get beaten with an anvil--to a large extent it's reality, and there's nothing arrogant about pointing that out.

ctrzaska

Apr 15, 2016 at 6:55pm

Tom_Reingold said:

mjh said:
I think the issue is that you and others seem to speak about the banks as if nothing happened to reign them in after the 2008 crash. In fact, a lot has been done.

I have to assume "you and others" means "Tom Reingold and others" which means you're speaking of what I have said. Do I speak as if nothing happened? I know some stuff has happened. When did I say nothing happened? Please don't paint me with a broad brush. If you want to speak about my views, please refer to things I have said.

@ctrzaska, thank you for responding. I had to look up several of your terms. Those moves you mention probably will help. Don't they amount to ways to measure whether a bank is either too big to fail or unlikely to fail? So those of us who are concerned about banks' viability have every reason to be concerned. I don't know if you're saying, "Don't worry, we're fine," but if anyone does say that, I find it particularly unreassuring.

Reich and Krugman are warning us that there hasn't been enough reform for us to feel satisfied. Where do you disagree with them, if anywhere?

Krugman (who I'll admit I haven't read of late on the topic, and don't always agree with anyway) was not a believer in reducing the size of banks-- in fact the too big to fail argument never held water with him. His issue was with capital ratios and leverage, a lot of which earlier/current regs are attempting to address. BIG difference. If he's arguing now that they need to cut size as well, that's a huge about-face on his part.

ctrzaska

Apr 15, 2016 at 6:57pm

It's the same issue for those oddly looking to reintroduce Glass-Steagall-- the size ain't the issue, and bringing it back won't do squat. Sounds good, though.

Tom_Reingold

Apr 16, 2016 at 5:11am

If I understand it right, one of Glass-Steagall's main thrusts was that there are federally guaranteed deposits, and there are speculative investments that are not insured, and they should not be mixed in the same institution. It still seems like a good idea to me, and the mixture was a big cause of the meltdown.