Posted 11 months ago on Jan. 6, 2013, 7:28 p.m. EST by arturo
from Shanghai, Shanghai
This content is user submitted and not an official statement
With more and more local bankers and business groups in the United States coming out for Glass-Steagall restoration, Forbes Magazine again calls for it in an article published Jan. 4 strongly criticizing the behavior of JPMorgan Chase.
The piece, "JPMorgan Chase Should Yield Madoff Records," is an argument that the huge megabank is covering up its own connections to the Bernie Madoff Ponzi scheme from which it profited and then "got out," and has been sued (unsuccessfully) by the trustee for Madoff's victims. The bank is refusing to turn over any records relating to Madoff's operation to the Department of Justice, which has "requested" them, etc.
"The bank has repeatedly denied knowing about the Madoff fraud, although it managed to pull some $276 million from Madoff feeder funds three weeks before the swindler was arrested," writes Forbes. "Chase not only needs to turn over the documents, it owes the public, Madoff investors and shareholders a complete accounting of its role in the largest Ponzi scam in history. The bank is still stinging from its London Whale derivatives trading loss, which is estimated to be more than $6 billion.
"The Madoff case is yet another argument for bringing back Glass-Steagall protections passed during the 1930s, but scrapped in 1999 during a catastrophic deregulation of the industry.
"Why are banks still permitted to conduct risky trades while holding tight to the government's doctrine of too-big-to-fail? At the very least, their trading/investment operations should be separate entities from their federally insured deposits and loan businesses. Under that scenario, the traditional banking units would've stayed clear of phony hedge funds operators like Madoff."
On the same day, American Banker reported the Obama Administration Office of Controller of the Currency (OCC) has given banks more time to comply with restrictions on their swaps/derivatives activities — "a transition period". FDIC, OCC, and Fed had originally set July 16 deadline. But as primary regulator, OCC is allowed by Dodd-Frank to delay it, and is doing so. If the restrictions were implemented, "depository institutions could not use the federal assistance they receive - such as federal deposit insurance or access to the discount window - to support certain swaps activities."
The financial blog NerdWallet.com ran a short article Jan. 5, "In First Day of Legislative Year, a Bipartisan Bill To Restore Glass-Steagall," on the reintroduction of the Kaptur-Jones bill and its support in the 112th Congress. The blog notes the Huffington Post coverage of Senators Warren and King.
LPAC South Dakota leader Ron Weizcorek has long letter, "Only Glass-Steagall Can Avert Economic Collapse" posted on the Sioux Falls Daily Republic site, reporting the new Congressional developments.