In order to ensure that this thread continues to meet TL standards and follows the proper guidelines, we will be enforcing the rules in the OP more strictly. Be sure to give them a re-read to refresh your memory! The vast majority of you are contributing in a healthy way, keep it up!
NOTE: When providing a source, explain why you feel it is relevant and what purpose it adds to the discussion if it's not obvious. Also take note that unsubstantiated tweets/posts meant only to rekindle old arguments can result in a mod action.
The Federal Reserve’s point man on overseeing the banking industry on Monday questioned the benefit of reinstating a Depression-era law that would separate commercial and investment banking activities — an idea being championed by Sens. Elizabeth Warren (D-Mass.) and John McCain (R-Ariz.).
Last week the senators introduced what they are calling a modern day Glass-Steagall Act, arguing that Wall Street banks still pose a threat to the economy and taxpayers because they take too many risks risks and that the banking business should return to its “boring” roots.
Fed Gov. Daniel Tarullo said Monday that the repeal of Glass-Steagall in 1999 was not a major factor in the 2008 financial crisis and that putting it back in place would not necessarily address the current threats to the financial system, such as banks’ reliance on volatile short-term funding markets.
“There’s some question as to how much that separation would actually prevent the kind of problems we saw from developing,” Tarullo said at POLITICO’s Morning Money Breakfast Briefing in reference to financial institutions that ran into trouble during the financial crisis.
The repeal of Glass-Steagall has been seized upon by reform advocates as a moment when Wall Street deregulation went too far and the era of excessive risk taking that led to the 2008 financial crisis began in earnest.
The banking industry and some regulators have pushed back against this argument noting that the financial institutions that fared worst during the financial crisis — such as Lehman Brothers and Bear Stearns — were investment banks that didn’t have big commercial banking operations.
Warren last year campaigned on the idea of breaking apart banks’ commercial and investment banking activities, arguing if Wall Street banks want to make risky bets in financial markets, they should not be able to do so while still receiving a government backstop for their more traditional deposit-taking businesses.
Last week when the bill was introduced, Warren told reporters that a return to Glass-Steagall was just one piece of what should be done to further crack down on big banks.
“It will stop the game that these banks have played for far too long,” she added.
The bill would close loopholes and update Glass-Steagall by excluding new instruments, like complex derivatives and swaps, from traditional commercial banking, Warren said. She acknowledged that the bill by itself would not end too big to fail, but said it would make financial institutions smaller and safer by separating depository institutions from riskier activities.
Warren even has a slogan for the bill — “Banking should be boring” — and a website urging visitors to sign their names in support of the bill.
“Americans want safe banks,” she said. “The banks that handle their checking accounts, their savings accounts should be rock solid secure. And they should not be juicing their profits by taking those insured deposits and betting them in wild financial schemes.”
Tarullo also said Monday that while significant steps have been taken in recent years to make the financial system more stable, including requiring big banks to meet tougher capital standards, there are still areas that need to be addressed.
“My own view is that we still do need to do more to get to the point at which the risks posed by some of these institutions are confined to what we would think of manageable proportions,” Tarullo said.
Tarullo said at the top of the list should be putting in place reforms for short-term funding markets.
The 2010 Dodd-Frank Act is nearing its three year anniversary and several major rules required by the law have not been completed.
The law requires several agencies to collaborate on major new rules, such as the trading restrictions known as the Volcker rule, and Tarullo said that has contributed to the length it has taken to put new policies in place.
“I think it’s a little early to judge this but I think it’s undeniable that this feature of Dodd-Frank is part of what has slowed down the rulemaking process,” Tarullo said.
He added that time will tell whether this collaboration will lead to better results.
“I think people have gone out their way to try and be cooperative … because everyone understands the novelty of the situation and the sheer magnitude of it,” Tarullo said.
He also defended a new proposal unveiled by bank regulators last week that would double the leverage ratio required for the eight biggest U.S. banks, noting that the international capital agreement, known as Basel III, set a floor, not a ceiling for what countries that signed onto the agreement could put in place.
“There’s nothing that says that national authorities cannot make a judgment that they want more,” he said.
The leverage ratio requires banks to fund themselves with more equity and rely less on debt to fund their loans and other assets so they can withstand a greater amount of losses.
The industry has raised concerns that the proposal goes too far beyond what was agreed to under Basel III, and could put U.S. banks at a competitive disadvantage. But Tarullo said he does not think global harmonization of capital rules is as important as harmonizing other reforms being put in place, such as margin requirements for derivatives transactions, in response to the 2008 financial crisis.
“I don’t think that’s necessary in the capital area,” he said, noting that regulators in other countries continue to consider further efforts to boost capital, and have asked the Fed for more details on its leverage proposal.
“I think there is interest that people are showing in additional measures,” Tarullo added.
It's true that the repeal probably didn't cause the collapse. I'll even admit I was wrong claiming it was a major factor many months ago. However, that doesn't mean this modern day proposal wouldn't greatly strengthen our banking system. While the investment banks that went under did not have big commercial sides, they were also a size which would have been manageable in case of collapse.
We already have existing laws that make fraud and grossly negligent risk taking illegal. No one enforced them on the banks. Why is a new law that is just as unlikely to be enforced a solution?
The Federal Reserve’s point man on overseeing the banking industry on Monday questioned the benefit of reinstating a Depression-era law that would separate commercial and investment banking activities — an idea being championed by Sens. Elizabeth Warren (D-Mass.) and John McCain (R-Ariz.).
Last week the senators introduced what they are calling a modern day Glass-Steagall Act, arguing that Wall Street banks still pose a threat to the economy and taxpayers because they take too many risks risks and that the banking business should return to its “boring” roots.
Fed Gov. Daniel Tarullo said Monday that the repeal of Glass-Steagall in 1999 was not a major factor in the 2008 financial crisis and that putting it back in place would not necessarily address the current threats to the financial system, such as banks’ reliance on volatile short-term funding markets.
“There’s some question as to how much that separation would actually prevent the kind of problems we saw from developing,” Tarullo said at POLITICO’s Morning Money Breakfast Briefing in reference to financial institutions that ran into trouble during the financial crisis.
The repeal of Glass-Steagall has been seized upon by reform advocates as a moment when Wall Street deregulation went too far and the era of excessive risk taking that led to the 2008 financial crisis began in earnest.
The banking industry and some regulators have pushed back against this argument noting that the financial institutions that fared worst during the financial crisis — such as Lehman Brothers and Bear Stearns — were investment banks that didn’t have big commercial banking operations.
Warren last year campaigned on the idea of breaking apart banks’ commercial and investment banking activities, arguing if Wall Street banks want to make risky bets in financial markets, they should not be able to do so while still receiving a government backstop for their more traditional deposit-taking businesses.
Last week when the bill was introduced, Warren told reporters that a return to Glass-Steagall was just one piece of what should be done to further crack down on big banks.
“It will stop the game that these banks have played for far too long,” she added.
The bill would close loopholes and update Glass-Steagall by excluding new instruments, like complex derivatives and swaps, from traditional commercial banking, Warren said. She acknowledged that the bill by itself would not end too big to fail, but said it would make financial institutions smaller and safer by separating depository institutions from riskier activities.
Warren even has a slogan for the bill — “Banking should be boring” — and a website urging visitors to sign their names in support of the bill.
“Americans want safe banks,” she said. “The banks that handle their checking accounts, their savings accounts should be rock solid secure. And they should not be juicing their profits by taking those insured deposits and betting them in wild financial schemes.”
Tarullo also said Monday that while significant steps have been taken in recent years to make the financial system more stable, including requiring big banks to meet tougher capital standards, there are still areas that need to be addressed.
“My own view is that we still do need to do more to get to the point at which the risks posed by some of these institutions are confined to what we would think of manageable proportions,” Tarullo said.
Tarullo said at the top of the list should be putting in place reforms for short-term funding markets.
The 2010 Dodd-Frank Act is nearing its three year anniversary and several major rules required by the law have not been completed.
The law requires several agencies to collaborate on major new rules, such as the trading restrictions known as the Volcker rule, and Tarullo said that has contributed to the length it has taken to put new policies in place.
“I think it’s a little early to judge this but I think it’s undeniable that this feature of Dodd-Frank is part of what has slowed down the rulemaking process,” Tarullo said.
He added that time will tell whether this collaboration will lead to better results.
“I think people have gone out their way to try and be cooperative … because everyone understands the novelty of the situation and the sheer magnitude of it,” Tarullo said.
He also defended a new proposal unveiled by bank regulators last week that would double the leverage ratio required for the eight biggest U.S. banks, noting that the international capital agreement, known as Basel III, set a floor, not a ceiling for what countries that signed onto the agreement could put in place.
“There’s nothing that says that national authorities cannot make a judgment that they want more,” he said.
The leverage ratio requires banks to fund themselves with more equity and rely less on debt to fund their loans and other assets so they can withstand a greater amount of losses.
The industry has raised concerns that the proposal goes too far beyond what was agreed to under Basel III, and could put U.S. banks at a competitive disadvantage. But Tarullo said he does not think global harmonization of capital rules is as important as harmonizing other reforms being put in place, such as margin requirements for derivatives transactions, in response to the 2008 financial crisis.
“I don’t think that’s necessary in the capital area,” he said, noting that regulators in other countries continue to consider further efforts to boost capital, and have asked the Fed for more details on its leverage proposal.
“I think there is interest that people are showing in additional measures,” Tarullo added.
It's true that the repeal probably didn't cause the collapse. I'll even admit I was wrong claiming it was a major factor many months ago. However, that doesn't mean this modern day proposal wouldn't greatly strengthen our banking system. While the investment banks that went under did not have big commercial sides, they were also a size which would have been manageable in case of collapse.
We already have existing laws that make fraud and grossly negligent risk taking illegal. No one enforced them on the banks. Why is a new law that is just as unlikely to be enforced a solution?
Well, that has to do with banks being so large. Like the HSBC nonsense, by actually taking significant action against those banks and their heads, you expose the entire system to instability. Nicely enough, this proposal would force a bank like HSBC to break up into smaller portions in order to do business in the U.S. At that point, it becomes much easier to target departments/banks that break the law, and punishing them justly doesn't pose the same systemic risk.
Calling Mayor Bob Filner "tragically unsafe for any woman to approach," former Councilwoman Donna Frye on Monday renewed her call for his resignation while sharing explicit details about encounters that women had with the mayor.
Frye read from statements from two unnamed women, including one who was a campaign volunteer who said that Filner had kissed her on a public sidewalk, "jamming his tongue down her throat" and later groped her under her bra when she drove him back to his office.
Frye was joined at a news conference by attorneys Marco Gonzalez and Cory Briggs, who also have called for the mayor to step down because they had firsthand accounts that he sexually harassed women. Gonzalez said a client spent six months working in the mayor's office and complained "he grabbed her ass and touched her chest."
The funny thing is, after the scandals were made public, apparently Mayor Filner apologized, then the next day, he backtracked and was all, "nvm, I didn't do anything - investigate me." Now, while the entire city is telling him to resign, he himself refuses to do so, so there may be a recall.
This was also pretty facepalm worthy:
SAN DIEGO — A former Cal State San Marcos student who rigged a campus election by using hundreds of stolen student passwords to cast votes for himself and friends was sentenced Monday in U.S. District Court to 12 months in federal custody.
Matthew Weaver, 22, of Huntington Beach was running for student council president in March 2012 when campus police caught him at a school computer with a keylogger, a small electronic device that secretly records a computer user’s keystrokes.
The Federal Reserve’s point man on overseeing the banking industry on Monday questioned the benefit of reinstating a Depression-era law that would separate commercial and investment banking activities — an idea being championed by Sens. Elizabeth Warren (D-Mass.) and John McCain (R-Ariz.).
Last week the senators introduced what they are calling a modern day Glass-Steagall Act, arguing that Wall Street banks still pose a threat to the economy and taxpayers because they take too many risks risks and that the banking business should return to its “boring” roots.
Fed Gov. Daniel Tarullo said Monday that the repeal of Glass-Steagall in 1999 was not a major factor in the 2008 financial crisis and that putting it back in place would not necessarily address the current threats to the financial system, such as banks’ reliance on volatile short-term funding markets.
“There’s some question as to how much that separation would actually prevent the kind of problems we saw from developing,” Tarullo said at POLITICO’s Morning Money Breakfast Briefing in reference to financial institutions that ran into trouble during the financial crisis.
The repeal of Glass-Steagall has been seized upon by reform advocates as a moment when Wall Street deregulation went too far and the era of excessive risk taking that led to the 2008 financial crisis began in earnest.
The banking industry and some regulators have pushed back against this argument noting that the financial institutions that fared worst during the financial crisis — such as Lehman Brothers and Bear Stearns — were investment banks that didn’t have big commercial banking operations.
Warren last year campaigned on the idea of breaking apart banks’ commercial and investment banking activities, arguing if Wall Street banks want to make risky bets in financial markets, they should not be able to do so while still receiving a government backstop for their more traditional deposit-taking businesses.
Last week when the bill was introduced, Warren told reporters that a return to Glass-Steagall was just one piece of what should be done to further crack down on big banks.
“It will stop the game that these banks have played for far too long,” she added.
The bill would close loopholes and update Glass-Steagall by excluding new instruments, like complex derivatives and swaps, from traditional commercial banking, Warren said. She acknowledged that the bill by itself would not end too big to fail, but said it would make financial institutions smaller and safer by separating depository institutions from riskier activities.
Warren even has a slogan for the bill — “Banking should be boring” — and a website urging visitors to sign their names in support of the bill.
“Americans want safe banks,” she said. “The banks that handle their checking accounts, their savings accounts should be rock solid secure. And they should not be juicing their profits by taking those insured deposits and betting them in wild financial schemes.”
Tarullo also said Monday that while significant steps have been taken in recent years to make the financial system more stable, including requiring big banks to meet tougher capital standards, there are still areas that need to be addressed.
“My own view is that we still do need to do more to get to the point at which the risks posed by some of these institutions are confined to what we would think of manageable proportions,” Tarullo said.
Tarullo said at the top of the list should be putting in place reforms for short-term funding markets.
The 2010 Dodd-Frank Act is nearing its three year anniversary and several major rules required by the law have not been completed.
The law requires several agencies to collaborate on major new rules, such as the trading restrictions known as the Volcker rule, and Tarullo said that has contributed to the length it has taken to put new policies in place.
“I think it’s a little early to judge this but I think it’s undeniable that this feature of Dodd-Frank is part of what has slowed down the rulemaking process,” Tarullo said.
He added that time will tell whether this collaboration will lead to better results.
“I think people have gone out their way to try and be cooperative … because everyone understands the novelty of the situation and the sheer magnitude of it,” Tarullo said.
He also defended a new proposal unveiled by bank regulators last week that would double the leverage ratio required for the eight biggest U.S. banks, noting that the international capital agreement, known as Basel III, set a floor, not a ceiling for what countries that signed onto the agreement could put in place.
“There’s nothing that says that national authorities cannot make a judgment that they want more,” he said.
The leverage ratio requires banks to fund themselves with more equity and rely less on debt to fund their loans and other assets so they can withstand a greater amount of losses.
The industry has raised concerns that the proposal goes too far beyond what was agreed to under Basel III, and could put U.S. banks at a competitive disadvantage. But Tarullo said he does not think global harmonization of capital rules is as important as harmonizing other reforms being put in place, such as margin requirements for derivatives transactions, in response to the 2008 financial crisis.
“I don’t think that’s necessary in the capital area,” he said, noting that regulators in other countries continue to consider further efforts to boost capital, and have asked the Fed for more details on its leverage proposal.
“I think there is interest that people are showing in additional measures,” Tarullo added.
It's true that the repeal probably didn't cause the collapse. I'll even admit I was wrong claiming it was a major factor many months ago. However, that doesn't mean this modern day proposal wouldn't greatly strengthen our banking system. While the investment banks that went under did not have big commercial sides, they were also a size which would have been manageable in case of collapse.
We already have existing laws that make fraud and grossly negligent risk taking illegal. No one enforced them on the banks. Why is a new law that is just as unlikely to be enforced a solution?
Well, that has to do with banks being so large. Like the HSBC nonsense, by actually taking significant action against those banks and their heads, you expose the entire system to instability. Nicely enough, this proposal would force a bank like HSBC to break up into smaller portions in order to do business in the U.S. At that point, it becomes much easier to target departments/banks that break the law, and punishing them justly doesn't pose the same systemic risk.
The risk to the system never came because the banks were too big. If anything their size created stability because they were able to eat tremendous losses. The risk came from the banks deliberately taking grossly negligent risks because they knew they'd never be punished.
The "we're so big the system will come toppling down if you let us fail" was rhetoric the banks used to get bailouts, that doesn't mean they didn't run at a dead sprint toward the cliff and then demand a golden parachute after they jumped.
The Federal Reserve’s point man on overseeing the banking industry on Monday questioned the benefit of reinstating a Depression-era law that would separate commercial and investment banking activities — an idea being championed by Sens. Elizabeth Warren (D-Mass.) and John McCain (R-Ariz.).
Last week the senators introduced what they are calling a modern day Glass-Steagall Act, arguing that Wall Street banks still pose a threat to the economy and taxpayers because they take too many risks risks and that the banking business should return to its “boring” roots.
Fed Gov. Daniel Tarullo said Monday that the repeal of Glass-Steagall in 1999 was not a major factor in the 2008 financial crisis and that putting it back in place would not necessarily address the current threats to the financial system, such as banks’ reliance on volatile short-term funding markets.
“There’s some question as to how much that separation would actually prevent the kind of problems we saw from developing,” Tarullo said at POLITICO’s Morning Money Breakfast Briefing in reference to financial institutions that ran into trouble during the financial crisis.
The repeal of Glass-Steagall has been seized upon by reform advocates as a moment when Wall Street deregulation went too far and the era of excessive risk taking that led to the 2008 financial crisis began in earnest.
The banking industry and some regulators have pushed back against this argument noting that the financial institutions that fared worst during the financial crisis — such as Lehman Brothers and Bear Stearns — were investment banks that didn’t have big commercial banking operations.
Warren last year campaigned on the idea of breaking apart banks’ commercial and investment banking activities, arguing if Wall Street banks want to make risky bets in financial markets, they should not be able to do so while still receiving a government backstop for their more traditional deposit-taking businesses.
Last week when the bill was introduced, Warren told reporters that a return to Glass-Steagall was just one piece of what should be done to further crack down on big banks.
“It will stop the game that these banks have played for far too long,” she added.
The bill would close loopholes and update Glass-Steagall by excluding new instruments, like complex derivatives and swaps, from traditional commercial banking, Warren said. She acknowledged that the bill by itself would not end too big to fail, but said it would make financial institutions smaller and safer by separating depository institutions from riskier activities.
Warren even has a slogan for the bill — “Banking should be boring” — and a website urging visitors to sign their names in support of the bill.
“Americans want safe banks,” she said. “The banks that handle their checking accounts, their savings accounts should be rock solid secure. And they should not be juicing their profits by taking those insured deposits and betting them in wild financial schemes.”
Tarullo also said Monday that while significant steps have been taken in recent years to make the financial system more stable, including requiring big banks to meet tougher capital standards, there are still areas that need to be addressed.
“My own view is that we still do need to do more to get to the point at which the risks posed by some of these institutions are confined to what we would think of manageable proportions,” Tarullo said.
Tarullo said at the top of the list should be putting in place reforms for short-term funding markets.
The 2010 Dodd-Frank Act is nearing its three year anniversary and several major rules required by the law have not been completed.
The law requires several agencies to collaborate on major new rules, such as the trading restrictions known as the Volcker rule, and Tarullo said that has contributed to the length it has taken to put new policies in place.
“I think it’s a little early to judge this but I think it’s undeniable that this feature of Dodd-Frank is part of what has slowed down the rulemaking process,” Tarullo said.
He added that time will tell whether this collaboration will lead to better results.
“I think people have gone out their way to try and be cooperative … because everyone understands the novelty of the situation and the sheer magnitude of it,” Tarullo said.
He also defended a new proposal unveiled by bank regulators last week that would double the leverage ratio required for the eight biggest U.S. banks, noting that the international capital agreement, known as Basel III, set a floor, not a ceiling for what countries that signed onto the agreement could put in place.
“There’s nothing that says that national authorities cannot make a judgment that they want more,” he said.
The leverage ratio requires banks to fund themselves with more equity and rely less on debt to fund their loans and other assets so they can withstand a greater amount of losses.
The industry has raised concerns that the proposal goes too far beyond what was agreed to under Basel III, and could put U.S. banks at a competitive disadvantage. But Tarullo said he does not think global harmonization of capital rules is as important as harmonizing other reforms being put in place, such as margin requirements for derivatives transactions, in response to the 2008 financial crisis.
“I don’t think that’s necessary in the capital area,” he said, noting that regulators in other countries continue to consider further efforts to boost capital, and have asked the Fed for more details on its leverage proposal.
“I think there is interest that people are showing in additional measures,” Tarullo added.
It's true that the repeal probably didn't cause the collapse. I'll even admit I was wrong claiming it was a major factor many months ago. However, that doesn't mean this modern day proposal wouldn't greatly strengthen our banking system. While the investment banks that went under did not have big commercial sides, they were also a size which would have been manageable in case of collapse.
We already have existing laws that make fraud and grossly negligent risk taking illegal. No one enforced them on the banks. Why is a new law that is just as unlikely to be enforced a solution?
Well, that has to do with banks being so large. Like the HSBC nonsense, by actually taking significant action against those banks and their heads, you expose the entire system to instability. Nicely enough, this proposal would force a bank like HSBC to break up into smaller portions in order to do business in the U.S. At that point, it becomes much easier to target departments/banks that break the law, and punishing them justly doesn't pose the same systemic risk.
The risk to the system never came because the banks were too big. If anything their size created stability because they were able to eat tremendous losses. The risk came from the banks deliberately taking grossly negligent risks because they knew they'd never be punished.
The "we're so big the system will come toppling down if you let us fail" was rhetoric the banks used to get bailouts, that doesn't mean they didn't run at a dead sprint toward the cliff and then demand a golden parachute after they jumped.
Don't ignore the public policy and regulation that steered the banks to all take substantially the same risks. If everyone is taking stupid risks its really not a systemic problem...unless they all take the same stupid risks.
The Federal Reserve’s point man on overseeing the banking industry on Monday questioned the benefit of reinstating a Depression-era law that would separate commercial and investment banking activities — an idea being championed by Sens. Elizabeth Warren (D-Mass.) and John McCain (R-Ariz.).
Last week the senators introduced what they are calling a modern day Glass-Steagall Act, arguing that Wall Street banks still pose a threat to the economy and taxpayers because they take too many risks risks and that the banking business should return to its “boring” roots.
Fed Gov. Daniel Tarullo said Monday that the repeal of Glass-Steagall in 1999 was not a major factor in the 2008 financial crisis and that putting it back in place would not necessarily address the current threats to the financial system, such as banks’ reliance on volatile short-term funding markets.
“There’s some question as to how much that separation would actually prevent the kind of problems we saw from developing,” Tarullo said at POLITICO’s Morning Money Breakfast Briefing in reference to financial institutions that ran into trouble during the financial crisis.
The repeal of Glass-Steagall has been seized upon by reform advocates as a moment when Wall Street deregulation went too far and the era of excessive risk taking that led to the 2008 financial crisis began in earnest.
The banking industry and some regulators have pushed back against this argument noting that the financial institutions that fared worst during the financial crisis — such as Lehman Brothers and Bear Stearns — were investment banks that didn’t have big commercial banking operations.
Warren last year campaigned on the idea of breaking apart banks’ commercial and investment banking activities, arguing if Wall Street banks want to make risky bets in financial markets, they should not be able to do so while still receiving a government backstop for their more traditional deposit-taking businesses.
Last week when the bill was introduced, Warren told reporters that a return to Glass-Steagall was just one piece of what should be done to further crack down on big banks.
“It will stop the game that these banks have played for far too long,” she added.
The bill would close loopholes and update Glass-Steagall by excluding new instruments, like complex derivatives and swaps, from traditional commercial banking, Warren said. She acknowledged that the bill by itself would not end too big to fail, but said it would make financial institutions smaller and safer by separating depository institutions from riskier activities.
Warren even has a slogan for the bill — “Banking should be boring” — and a website urging visitors to sign their names in support of the bill.
“Americans want safe banks,” she said. “The banks that handle their checking accounts, their savings accounts should be rock solid secure. And they should not be juicing their profits by taking those insured deposits and betting them in wild financial schemes.”
Tarullo also said Monday that while significant steps have been taken in recent years to make the financial system more stable, including requiring big banks to meet tougher capital standards, there are still areas that need to be addressed.
“My own view is that we still do need to do more to get to the point at which the risks posed by some of these institutions are confined to what we would think of manageable proportions,” Tarullo said.
Tarullo said at the top of the list should be putting in place reforms for short-term funding markets.
The 2010 Dodd-Frank Act is nearing its three year anniversary and several major rules required by the law have not been completed.
The law requires several agencies to collaborate on major new rules, such as the trading restrictions known as the Volcker rule, and Tarullo said that has contributed to the length it has taken to put new policies in place.
“I think it’s a little early to judge this but I think it’s undeniable that this feature of Dodd-Frank is part of what has slowed down the rulemaking process,” Tarullo said.
He added that time will tell whether this collaboration will lead to better results.
“I think people have gone out their way to try and be cooperative … because everyone understands the novelty of the situation and the sheer magnitude of it,” Tarullo said.
He also defended a new proposal unveiled by bank regulators last week that would double the leverage ratio required for the eight biggest U.S. banks, noting that the international capital agreement, known as Basel III, set a floor, not a ceiling for what countries that signed onto the agreement could put in place.
“There’s nothing that says that national authorities cannot make a judgment that they want more,” he said.
The leverage ratio requires banks to fund themselves with more equity and rely less on debt to fund their loans and other assets so they can withstand a greater amount of losses.
The industry has raised concerns that the proposal goes too far beyond what was agreed to under Basel III, and could put U.S. banks at a competitive disadvantage. But Tarullo said he does not think global harmonization of capital rules is as important as harmonizing other reforms being put in place, such as margin requirements for derivatives transactions, in response to the 2008 financial crisis.
“I don’t think that’s necessary in the capital area,” he said, noting that regulators in other countries continue to consider further efforts to boost capital, and have asked the Fed for more details on its leverage proposal.
“I think there is interest that people are showing in additional measures,” Tarullo added.
It's true that the repeal probably didn't cause the collapse. I'll even admit I was wrong claiming it was a major factor many months ago. However, that doesn't mean this modern day proposal wouldn't greatly strengthen our banking system. While the investment banks that went under did not have big commercial sides, they were also a size which would have been manageable in case of collapse.
We already have existing laws that make fraud and grossly negligent risk taking illegal. No one enforced them on the banks. Why is a new law that is just as unlikely to be enforced a solution?
Well, that has to do with banks being so large. Like the HSBC nonsense, by actually taking significant action against those banks and their heads, you expose the entire system to instability. Nicely enough, this proposal would force a bank like HSBC to break up into smaller portions in order to do business in the U.S. At that point, it becomes much easier to target departments/banks that break the law, and punishing them justly doesn't pose the same systemic risk.
The risk to the system never came because the banks were too big. If anything their size created stability because they were able to eat tremendous losses. The risk came from the banks deliberately taking grossly negligent risks because they knew they'd never be punished.
The "we're so big the system will come toppling down if you let us fail" was rhetoric the banks used to get bailouts, that doesn't mean they didn't run at a dead sprint toward the cliff and then demand a golden parachute after they jumped.
The risk to the SYSTEM is because banks are too big. The risk to the individual BANKS is diminished due to their size, but that's only if they behave if they were smaller.
When making the risk calculations, their own data is all that they have (that, and regulatory standards). They capitalize and hedge according to their actuarial tables, which allow them to take their profit seeking risks. Their own size goes into these risk calculations, allowing them to push the limit for larger profits. Ultimately, some will be wrong eventually, sometimes spectacularly enough that they fail. This should be no surprise, and no greater size of the bank will prevent this (unless the bank can literally print its own money, like the Fed).
Note that this isn't because they "know they will be bailed out." These people don't think they will ever fail, like many of us. They make all the necessary preparations based on what they know might happen in a real marketplace, and sometimes they are wrong.
Texas state Sen. Wendy Davis' (D) campaign was expected to announce Monday that it raised almost $1 million in the last two weeks of June after her well-known filibuster of an abortion bill, the Texas Tribune reported.
Davis' campaign was expected to report raising $933,000 between June 17 and June 30 to the Texas Ethics Commission on its Monday filing deadline, according to the Tribune. Most of the 15,290 donations came from small donors, under $250 each.
Davis told the Tribune in an interview last week that if she decides to run to replace Texas Gov. Rick Perry (R), fundraising in the red state would be "a key question." State Attorney General Greg Abbott (R), who announced his own gubernatorial bid Sunday, reported raising $4.8 million for the same two-week period, according to the Tribune.
A 3 1/2-hour long meeting of all senators ended Monday night without a resolution to the impasse over stalled presidential nominees, bringing Senate Majority Leader Harry Reid (D-NV) one step closer to the nuclear option.
Reid said after the meeting in the Old Senate Chamber that there was no deal reached but that talks would continue. Don Stewart, a spokesperson for Senate Minority Leader Mitch McConnell (R-KY), said “discussions will continue” because “a clear bipartisan majority in the meeting believed the Leaders ought to find a solution.”
Seven nominees are scheduled to come up for Senate votes Tuesday morning at 10 a.m. ET: three members of the National Labor Relations Board and picks to run the Consumer Financial Protection Bureau, Environmental Protection Agency, Labor Department and Export-Import Bank. Reid has promised to change the rules by a simple majority vote if Republicans don’t let all of them through, and he’s confident he has the necessary 51 votes.
The crux of the dispute is over two NLRB nominees who were recess-appointed by President Obama (Sharon Block and Richard Griffin), and Richard Cordray to lead the CFPB. In a new development, Sen. John Thune (R-SD) said Cordray may have the votes to break a filibuster and be confirmed but that there was no agreement on the NLRB picks.
Sen. John McCain (R-AZ), who has led the push to strike an amicable resolution, told TPM that the meeting brought the effort “a little closer but not much.” His proposal involved replacing the two recess-appointed NLRB picks with different nominees.
A 3 1/2-hour long meeting of all senators ended Monday night without a resolution to the impasse over stalled presidential nominees, bringing Senate Majority Leader Harry Reid (D-NV) one step closer to the nuclear option.
Reid said after the meeting in the Old Senate Chamber that there was no deal reached but that talks would continue. Don Stewart, a spokesperson for Senate Minority Leader Mitch McConnell (R-KY), said “discussions will continue” because “a clear bipartisan majority in the meeting believed the Leaders ought to find a solution.”
Seven nominees are scheduled to come up for Senate votes Tuesday morning at 10 a.m. ET: three members of the National Labor Relations Board and picks to run the Consumer Financial Protection Bureau, Environmental Protection Agency, Labor Department and Export-Import Bank. Reid has promised to change the rules by a simple majority vote if Republicans don’t let all of them through, and he’s confident he has the necessary 51 votes.
The crux of the dispute is over two NLRB nominees who were recess-appointed by President Obama (Sharon Block and Richard Griffin), and Richard Cordray to lead the CFPB. In a new development, Sen. John Thune (R-SD) said Cordray may have the votes to break a filibuster and be confirmed but that there was no agreement on the NLRB picks.
Sen. John McCain (R-AZ), who has led the push to strike an amicable resolution, told TPM that the meeting brought the effort “a little closer but not much.” His proposal involved replacing the two recess-appointed NLRB picks with different nominees.
Reid should just push the nuclear option. He's been threatening to do so since 2010. He had a chance right after the election, but chickened out then. Time to back up his threat and end the gridlock.
The Federal Reserve’s point man on overseeing the banking industry on Monday questioned the benefit of reinstating a Depression-era law that would separate commercial and investment banking activities — an idea being championed by Sens. Elizabeth Warren (D-Mass.) and John McCain (R-Ariz.).
Last week the senators introduced what they are calling a modern day Glass-Steagall Act, arguing that Wall Street banks still pose a threat to the economy and taxpayers because they take too many risks risks and that the banking business should return to its “boring” roots.
Fed Gov. Daniel Tarullo said Monday that the repeal of Glass-Steagall in 1999 was not a major factor in the 2008 financial crisis and that putting it back in place would not necessarily address the current threats to the financial system, such as banks’ reliance on volatile short-term funding markets.
“There’s some question as to how much that separation would actually prevent the kind of problems we saw from developing,” Tarullo said at POLITICO’s Morning Money Breakfast Briefing in reference to financial institutions that ran into trouble during the financial crisis.
The repeal of Glass-Steagall has been seized upon by reform advocates as a moment when Wall Street deregulation went too far and the era of excessive risk taking that led to the 2008 financial crisis began in earnest.
The banking industry and some regulators have pushed back against this argument noting that the financial institutions that fared worst during the financial crisis — such as Lehman Brothers and Bear Stearns — were investment banks that didn’t have big commercial banking operations.
Warren last year campaigned on the idea of breaking apart banks’ commercial and investment banking activities, arguing if Wall Street banks want to make risky bets in financial markets, they should not be able to do so while still receiving a government backstop for their more traditional deposit-taking businesses.
Last week when the bill was introduced, Warren told reporters that a return to Glass-Steagall was just one piece of what should be done to further crack down on big banks.
“It will stop the game that these banks have played for far too long,” she added.
The bill would close loopholes and update Glass-Steagall by excluding new instruments, like complex derivatives and swaps, from traditional commercial banking, Warren said. She acknowledged that the bill by itself would not end too big to fail, but said it would make financial institutions smaller and safer by separating depository institutions from riskier activities.
Warren even has a slogan for the bill — “Banking should be boring” — and a website urging visitors to sign their names in support of the bill.
“Americans want safe banks,” she said. “The banks that handle their checking accounts, their savings accounts should be rock solid secure. And they should not be juicing their profits by taking those insured deposits and betting them in wild financial schemes.”
Tarullo also said Monday that while significant steps have been taken in recent years to make the financial system more stable, including requiring big banks to meet tougher capital standards, there are still areas that need to be addressed.
“My own view is that we still do need to do more to get to the point at which the risks posed by some of these institutions are confined to what we would think of manageable proportions,” Tarullo said.
Tarullo said at the top of the list should be putting in place reforms for short-term funding markets.
The 2010 Dodd-Frank Act is nearing its three year anniversary and several major rules required by the law have not been completed.
The law requires several agencies to collaborate on major new rules, such as the trading restrictions known as the Volcker rule, and Tarullo said that has contributed to the length it has taken to put new policies in place.
“I think it’s a little early to judge this but I think it’s undeniable that this feature of Dodd-Frank is part of what has slowed down the rulemaking process,” Tarullo said.
He added that time will tell whether this collaboration will lead to better results.
“I think people have gone out their way to try and be cooperative … because everyone understands the novelty of the situation and the sheer magnitude of it,” Tarullo said.
He also defended a new proposal unveiled by bank regulators last week that would double the leverage ratio required for the eight biggest U.S. banks, noting that the international capital agreement, known as Basel III, set a floor, not a ceiling for what countries that signed onto the agreement could put in place.
“There’s nothing that says that national authorities cannot make a judgment that they want more,” he said.
The leverage ratio requires banks to fund themselves with more equity and rely less on debt to fund their loans and other assets so they can withstand a greater amount of losses.
The industry has raised concerns that the proposal goes too far beyond what was agreed to under Basel III, and could put U.S. banks at a competitive disadvantage. But Tarullo said he does not think global harmonization of capital rules is as important as harmonizing other reforms being put in place, such as margin requirements for derivatives transactions, in response to the 2008 financial crisis.
“I don’t think that’s necessary in the capital area,” he said, noting that regulators in other countries continue to consider further efforts to boost capital, and have asked the Fed for more details on its leverage proposal.
“I think there is interest that people are showing in additional measures,” Tarullo added.
It's true that the repeal probably didn't cause the collapse. I'll even admit I was wrong claiming it was a major factor many months ago. However, that doesn't mean this modern day proposal wouldn't greatly strengthen our banking system. While the investment banks that went under did not have big commercial sides, they were also a size which would have been manageable in case of collapse.
We already have existing laws that make fraud and grossly negligent risk taking illegal. No one enforced them on the banks. Why is a new law that is just as unlikely to be enforced a solution?
Well, that has to do with banks being so large. Like the HSBC nonsense, by actually taking significant action against those banks and their heads, you expose the entire system to instability. Nicely enough, this proposal would force a bank like HSBC to break up into smaller portions in order to do business in the U.S. At that point, it becomes much easier to target departments/banks that break the law, and punishing them justly doesn't pose the same systemic risk.
The risk to the system never came because the banks were too big. If anything their size created stability because they were able to eat tremendous losses. The risk came from the banks deliberately taking grossly negligent risks because they knew they'd never be punished.
The "we're so big the system will come toppling down if you let us fail" was rhetoric the banks used to get bailouts, that doesn't mean they didn't run at a dead sprint toward the cliff and then demand a golden parachute after they jumped.
Don't ignore the public policy and regulation that steered the banks to all take substantially the same risks. If everyone is taking stupid risks its really not a systemic problem...unless they all take the same stupid risks.
Yes I know about the public policy stuff that made it WAY too easy to over leverage a bank. Credit was too cheap and the government was guaranteeing way too many loans. But yeah, pretty much everyone was taking the same stupid risks: sub prime loans. Those loans were almost guaranteed to default but banks were giving them out like condoms at a college health center.
WASHINGTON -- The Senate began stepping back from the "nuclear" brink Tuesday as leaders were said to be close to cutting a deal to approve seven of President Barack Obama's long-blocked nominees.
The deal, which was negotiated primarily between Senate Majority Leader Harry Reid (D-Nev.) and Sen. John McCain (R-Ariz.), was described by a Senate Democratic aide as one in which the Republican Party will allow votes to confirm the seven executive nominees, provided that Obama replaces his two nominees to the National Labor Relations Board with two other names. Those nominees would have a commitment "in writing" from GOP leadership to get a vote, the Democratic aide said.
As an indication that the deal will hold, the Senate voted 71 to 29 Tuesday morning, with 17 Republicans in support, to end the filibuster on Richard Cordray's nomination to lead the Consumer Financial Protection Bureau.
Getting replacements for the NLRB nominees is, more or less, a face-saving measure for the GOP leadership. Republicans had argued that the nominees, Sharon Block and Richard Griffin, were irrevocably tainted because Obama elevated them as recess appointments, which were ruled unconstitutional by the U.S. Court of Appeals for the D.C. Circuit. Democrats countered that such taint would have been wiped away had Block and Griffin received a clean vote by the Senate.
When asked about such claims, a top Republican Senate aide remained unsatisfied, arguing that to consider their nominations at this point would be to "codify" the president's ability to make "recess appointments illegally."
On July 17 2013 05:48 {CC}StealthBlue wrote: Is it just me or has YouTube been sucking a lot recently? Anyways to the idiocy that is CNBC.
http://youtu.be/ONEcoq9pjac
What's wrong with CNBC? I find that they have tons of diversity of opinion on and actually bother to ask good questions.
That interview was just different people trying to find a different way to say, "lol, why are you even bothering with this?" No questions about what the bill does, how it would affect these banks, how it would cause their breakups, or how is it different from Glass-Steagall.
On July 17 2013 05:48 {CC}StealthBlue wrote: Is it just me or has YouTube been sucking a lot recently? Anyways to the idiocy that is CNBC.
http://youtu.be/ONEcoq9pjac
What's wrong with CNBC? I find that they have tons of diversity of opinion on and actually bother to ask good questions.
That interview was just different people trying to find a different way to say, "lol, why are you even bothering with this?" No questions about what the bill does, how it would affect these banks, how it would cause their breakups, or how is it different from Glass-Steagall.
Well they can only go into it so deep in one interview. Warren had more of a chance to explain her reasoning in the first half of the interview. Full interview here:
They've also had many interviews with other people on the topic of Glass-Steagall over the years (they asked at least four other guests about it the same day as Warren's interview) so their viewer base is more familiar with the concept than a general audience. Also, their format is more discussion oriented than straight interview.
Edit: Here's another discussion they had that day on Glass-Steagall:
Individuals buying health insurance on their own will see their premiums tumble next year in New York State as changes under the federal health care law take effect, Gov. Andrew M. Cuomo announced on Wednesday.
State insurance regulators say they have approved rates for 2014 that are at least 50 percent lower on average than those currently available in New York. Beginning in October, individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly. With federal subsidies, the cost will be even lower.
Supporters of the new health care law, the Affordable Care Act, credited the drop in rates to the online purchasing exchanges the law created, which they say are spurring competition among insurers that are anticipating an influx of new customers. The law requires that an exchange be started in every state.
“Health insurance has suddenly become affordable in New York,” said Elisabeth Benjamin, vice president for health initiatives with the Community Service Society of New York. “It’s not bargain-basement prices, but we’re going from Bergdorf’s to Filene’s here.”
“The extraordinary decline in New York’s insurance rates for individual consumers demonstrates the profound promise of the Affordable Care Act,” she added.
I read that the same thing is taking effect in California, with individual premiums expected to decline from 10-30 percent in the next year or two. Cool stuff.
On July 18 2013 04:45 Souma wrote: Are there individuals who really pay $1,000 a month for health insurance...? That is insane.
That's a normal price for health insurance. So if you have insurance but aren't getting it subsidized by the government or your employer.. yes, that's what you pay.
Edit:
...in 2012:
• The average health care cost per employee was $10,522, up from $10,034 in 2011. • The employees' portion of the total health care premium was $2,204, up from $2,090 in 2011. • Average employee out-of-pocket costs, such as co-payments, co-insurance and deductibles, were $2,200, up from $2,072 in 2011.
EPT
