Forum Post: BoA, fdic, The Fed
Posted 13 years ago on Oct. 21, 2011, 10 a.m. EST by ForTheWinnebago
(143)
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Martin J. Gruenberg published the following article on October 9th, 2011 for Harvard Law School.
For the past year, this office has been developing its own resolution plans in order to be ready to resolve a failing systemic financial company. These internal FDIC resolution plans — developed pursuant to the Orderly Liquidation Authority, provided under Title II of Dodd-Frank — apply many of the same powers that the FDIC has long used to manage failed-bank receiverships to a failing systemically important financial institution. If the FDIC is appointed as receiver of such an institution, it will be required to carry out an orderly liquidation in a manner that maximizes the value of the company’s assets and ensures that creditors and shareholders appropriately bear any losses. The goal is to close the institution without putting the financial system at risk.
You don’t have to be a genius to figure out what Mr. Gruenberg is referring to when he writes “a failing systemic financial company.” I’ll give you a clue. It’s a bank and it’s in and of America. Mr. Gruenberg has been the acting head of the FDIC and was nominated by the White House to replace Sheila Bair. So, if it’s been bothering you that Bank of America has been allowed, (essentially by Mr. Gruenberg) to hoist, or would it be to foist, upon the taxpayers of the USA $53 trillion dollars in ticking derivatives by shifting them from BAC’s Merrill Lynch division to the FDIC insured Bank of America, relax… this will be orderly.
http://www.bloomberg.com/news/2011-10-18/bofa-said-to-split-regulators-over-moving-merrill-derivatives-to-bank-unit.html
amazing
Also see this
http://tiny.cc/yuvld
The report has the dry title FEDERAL RESERVE BANK GOVERNANCE: Opportunities Exist to Broaden Director Recruitment Efforts and Increase Transparency and is the result of an amendment to Dodd Frank by Bernie Sanders to audit the governance of the Fed. Sanders’ office published a useful list of highlights, such as:
The GAO identified 18 former and current members of the Federal Reserve’s board affiliated with banks and companies that received emergency loans from the Federal Reserve during the financial crisis including General Electric, JP Morgan Chase, and Lehman Brothers.
There are no restrictions on directors of the Federal Reserve Board from communicating concerns about their respective banks to the staff of the Federal Reserve.
Many of the Federal Reserve’s board of directors own stock or work directly for banks that are supervised and regulated by the Federal Reserve. These board members oversee the Federal Reserve’s operations including salary and personnel decisions.
Under current regulations, Fed directors who are employed by the banking industry or own stock in financial institutions can participate in decisions involving how much interest to charge to financial institutions receiving Fed loans; and the approval or disapproval of Federal Reserve credit to healthy banks and banks in “hazardous” condition.
The Federal Reserve does not publicly disclose its conflict of interest regulations or when it grants waivers to its conflict of interest regulations.