Forum Post: Too-Big-to-Fail Bank 'Definition' May Be -Expanded- by Global Regulators
Posted 12 years ago on Jan. 11, 2012, 8:50 p.m. EST by MonetizingDiscontent
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Does this mean that next time a crash happens like 2008, Goldman wont have to be so devious to get taxpayer's bailout money?
Too-Big-to-Fail Bank Definition May Be EXPANDED by Regulators
-Jan 10, 2012-
Global regulators may expand the definition of a too-big-to-fail financial firm, signing up domestic lenders, clearing houses and insurers to capital rules designed for the world’s biggest banks.
The “framework should be in place for domestically systemically important banks by the end of the year,” Mark Carney... http://topics.bloomberg.com/mark-carney/ ...chairman of the Financial Stability Board, said yesterday after a meeting of the group in Basel, http://topics.bloomberg.com/basel/ /// Switzerland. http://topics.bloomberg.com/switzerland/
Deutsche Bank AG (DBK), BNP Paribas SA (BNP) and Goldman Sachs Group Inc. (GS) were among 29 banks subject to the so-called capital surcharge on globally systemic financial institutions drawn up by the FSB in November. Banks will have to boost reserves by 1 to 2.5 percentage points above minimum levels agreed on by international regulators.....
2.5 percentage points? above what exactly?
I think Senator Sanders is absolutely correct, if they are too big to fail, they must be broken up. Obviously this meeting is designed to address that issue, and provide some semblance of reassurance -
I'm not reassured. In fact, I remain convinced, that if banks that are too big to fail are not broken up, they will continue to consolidate, reducing competition, and increasing predatory lending practices and pricing schemes.
I think we should make the entire savings and loan industry public.
Yeah.. these Too Big to Save Investment banks really must be separated from our commercial FDIC insured lending banks, which are backed by us. I so agree.
1 to 2.5 percentage points above their current capital requirements.
The requirement surcharge may be coming on top Basel III rules, judging from this article below I just dug up. although... this article states that a -7- percent minimum core capital buffer for all banks would be required. It's an older article though, so who knows how high the additional capital requirements will be exactly... they may have new numbers by the time it takes effect.
:::::G20 Names 29 Banks for Capital Surcharge, Recovery Plan:::::
http://www.reuters.com/article/2011/11/04/us-g20-financials-idUSTRE7A342420111104
-Fri Nov 4, 2011-
http://en.wikipedia.org/wiki/Capital_requirement
I don't even know what the requirements are now . . . and I was thinking in terms of AIG - which isn't a bank really - but it was supposed to follow a similar rule regarding a percentage of cash on hand to cover investments - and they blew past that with the Goldman deal.
Woops.
I say break them up.
Its a perfect tourniquet. If the bleeding can be stopped now, we live another day to addresses systemic flaws. Breaking them up would definitely stop the hemorrhaging.
I think it would most certainly curb their tendency toward predation of the public.