well, there were/are no walls between investment banking and retial banking and the funding for any number of complicated financial transactions. over and beyond the literal deregulation, it made it nearly impossible to regulate or audit the transactions of megabanks– it was too complicated. Same with the rating system- it was too complicated to give an ‘accurate’ rating of the value of a certain group of assets (nevermind the rating system itself is not govermental, so it has its own issues w/ conflicts of interests). Therefore, the players in the industry could deceive everyone about their net worth, which inflated their value on the market, which made them rich on short term profits and left every one else holding the bag (i.e., people who had personal investments in the market, homes, or through pensions)
All this is kind of pointless anyway unless overseas govts do the same. Nomura (Japan), Scotia and TD (Canada) are all ramping up investment banking in the US and UK a lot and are likely acquirers of US assets.
“And this is all predicated on the argument that more investing and more retail lending will help pull us out of our current economic slump?”
Yes, “more investing” broadly defined is pretty much the only way this happens.
It’s Ceasar washing his hands. Meaning that it probably won’t do much in solving systemic risks and definately won’t loosen lending standards or lower credit card rates but perhaps a political cover to the gov’t in allowing the non-banks financial institutions to fail should they experience profitability or liquidity problems.
Why denton? So this would force the break up the big banks? Isn’t that what this would essentially do? Why not break up the risk into more manageable chunks, so that we wouldn’t have such dramatic shocks if one company/bank goes bad?
thank god I bank with TD Bank – in Canadians I trust (maybe less with our prez Biff)
Posted by: more4less at January 21, 2010 2:44 PM
Commie.
well, there were/are no walls between investment banking and retial banking and the funding for any number of complicated financial transactions. over and beyond the literal deregulation, it made it nearly impossible to regulate or audit the transactions of megabanks– it was too complicated. Same with the rating system- it was too complicated to give an ‘accurate’ rating of the value of a certain group of assets (nevermind the rating system itself is not govermental, so it has its own issues w/ conflicts of interests). Therefore, the players in the industry could deceive everyone about their net worth, which inflated their value on the market, which made them rich on short term profits and left every one else holding the bag (i.e., people who had personal investments in the market, homes, or through pensions)
All this is kind of pointless anyway unless overseas govts do the same. Nomura (Japan), Scotia and TD (Canada) are all ramping up investment banking in the US and UK a lot and are likely acquirers of US assets.
“And this is all predicated on the argument that more investing and more retail lending will help pull us out of our current economic slump?”
Yes, “more investing” broadly defined is pretty much the only way this happens.
This article might be the most straightforward.
http://online.wsj.com/article/SB10001424052748703699204575016983630045768.html
It’s Ceasar washing his hands. Meaning that it probably won’t do much in solving systemic risks and definately won’t loosen lending standards or lower credit card rates but perhaps a political cover to the gov’t in allowing the non-banks financial institutions to fail should they experience profitability or liquidity problems.
thank god I bank with TD Bank – in Canadians I trust (maybe less with our prez Biff)
And this is all predicated on the argument that more investing and more retail lending will help pull us out of our current economic slump?
Why denton? So this would force the break up the big banks? Isn’t that what this would essentially do? Why not break up the risk into more manageable chunks, so that we wouldn’t have such dramatic shocks if one company/bank goes bad?
“Several lawmakers, most notably former presidential candidate John McCain. R-Ariz., have actively called for a return to Glass-Steagall.”
“btw, I hold your baking skillz pretty high and would love to get some brownie treats the next time you show up at the gatherings”
Shameless brownie whore