Has anybody read Dodd - Frank ? Maybe we should have because one provision effectively designates our largest banks as "Too Big to Fail " and guarantees their survival. We have 6,000 banks in this country but half the entire industry's assets are concentrated in the five largest banks. 20 years ago the top 10 banks accounted for 26% of all commercial banking assets. Now it is 61%. None of these institutions are being demure about their status. On the contrary, according to Andrew Haldane of the Bank Of England, they use their status to get preferential access to investment capital. In 2009, the silent subsidies enjoyed by these banks totalled some $2.3 trillion.
Several recent fiascoes have shown that the management of these banks do not know or fully understand their own risk exposures.
Richard Fisher, President of the Federal Reserve Bank of Dallas ( one of the few members of the Bd. Of Governors with some brains btw ) has shown that breaking up the largest banks would INCREASE their value and the supposed economies of scale that were to result from their large size do not exist.
Worst of all, the Financial Crisis did NOT have a chastening effect on the corporate culture of these banks. They still worship at the altar of short term fees and bonuses. Since Glass-Steagall has not been revived the next crisis will dwarf the last one thanks to the increased size of our largest banks.



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