(Dallas Fed president) Richard Fisher Says Too-Big-To-Fail Banks Need To Be Broken Up

[Redfairen]

Source: Reuters

The largest U.S. banks are "practitioners of crony capitalism," need to be broken up to ensure they are no longer considered too big to fail, and continue to threaten financial stability, a top Federal Reserve official said on Saturday.

Richard Fisher, president of the Dallas Fed, has been a critic of Wall Street's disproportionate influence since the financial crisis. But he was now taking his message to an unusual audience for a central banker: a high-profile Republican political action committee.

.......

"These institutions operate under a privileged status that exacts an unfair tax upon the American people," he said on the last day of the annual Conservative Political Action Conference (CPAC).

"They represent not only a threat to financial stability but to fair and open competition (and) are the practitioners of crony capitalism and not the agents of democratic capitalism that makes our country great," said Fisher, who has also been a vocal opponent of the Fed's unconventional monetary stimulus policies.

Read more: http://www.huffingtonpost.com/2013/03/16/fisher-too-big-to-fail_n_2891452.html

[demosincebirth]

1. They broke up American Telephone and Telegrgh (AT&T) years ago, but maybe not for the same reason.

[tclambert]

5. Seems like it came back together, like the T-1000 in Terminator 2

after it shattered in the liquid nitrogen.

[SharonAnn]

12. AT&T came back together, but WITHOUT regulation this time.

[RainDog]

2. k&r n/t

[Ash_F]

3. Sage words. rec'ed /nt

[Milliesmom]

4. Indict all the big banks..

Every major institution, just about, has been wrapped up in some significant scandal. Let’s recognize two things: that they are too big to manage and they are not too big to indict. [If] we agree on those two principles, then maybe we can begin to make them smaller, manage them better.”
~Former Governor Eliot Spitzer (D-NY)

Eliot Spitzer foresees a different approach to banks in 2013 from the U.S. government. Up until now – the American government has been fining banks in significant amounts … more in the past 3 years than at any time in history (source). But when comparing those fines to the profits these banks are seeing – it’s nothing. In the 3rd quarter – U.S. banks made nearly $38 billion in profits (source) and paying a couple hundred million in fines is like a parking ticket. In short – fines alone are not going to alter their behavor.



More at:

http://www.classwarfareexists.com/spitzer-banks-are-too-big-to-manage-and-they-are-not-too-big-to-indict/

[timdog44]

6. I am not very sophisitcated

when it comes to these kind of things. But it is obvious that the fines they are paying are not punitive. At first thought bigger fines, like entire profits of a financial quarter would cause some sphincters to tighten. Or maybe prison time instead of fines for the leaders of these institutions. That would be a deterrent. Of course the right thing to do would be to break them up into smaller institutions, the eventual solution, after nationalizing them for a period of time. It seems that a big problem with many corporations in America, are they are too big. Media seems to have the same problems what with newspapers, radio stations and TV all owned by the same people. (And they are not the liberal people we are lead to believe they are). Communications too. But I am getting off course. Banks. Big banks. Break them up and to prison with the CEOs. Just a gut feeling on this problem.

[paleotn]

8. fines to date, since the financial collapse....

...are generally viewed as simply the cost of doing business. It's a matter of moral risk, really. Fines and such aren't that big a deal compared to potential upsides. And the feds dare not really hammer any major financial player for fear of crashing the financial system, house of cards, so no worries there. If things really go to hell, like in 2007 - 2008, John Q. Taxpayer will bear the brunt in order to save said financial system that underlies the gainful employment of all of us, regardless of how close or far we are from the actual financial industry. Hell of a conundrum we've gotten ourselves into, isn't it. The real stink of it is, 99.999% of us had nothing to do with it.

[Lobo27]

7. I'm all for dismatling banks, but how do you do it.

W/o causing harm to the people. TyT has a video where they show that the banks and wall street have like a combined 700+ trillion in trades and what not. If some how that fails its fucking over. The worst is that they can't even track the god damn trades anymore, so the idiots don't even know when the bubble will burst only that it will burst..............................................

Unreal shit, it boggles the mind.

[paleotn]

9. Exactly.....

It's easy to just say break them up! But how? Unraveling all the counter parties and interdependencies is damn near impossible, in whats rapidly approaching a quadrillion dollar financial system of synthetic securities, derivatives of derivatives of derivatives and the like. For example, the absolute cluster created by simply trying to figure out who actually owns a defaulted mortgage, in the world of collateralized debt obligations, is no simple task. In the old days, it was simple. The bank you borrowed the money from owned the house if you stop making payments, because they were still sitting on the mortgage. Not any more. Even accurately assessing underlying risk of a single operations holdings, hedges, etc. has become a fools game. Only thing for certain is, the more complex the system, the higher the probability of a systemic failure and the more spectacular that failure will be. I really think the unpleasantness of 2007-2009 was just a warm up for things to come. Hope I'm wrong.

[timdog44]

11. In my simple mind

I say, just say they do not exist anymore. Neither do their debtors. Done.

[airplaneman]

13. I think it is quite simple.

1.) Nationalize them.
2.) Cancel all derivatives.
3.) Reinstate Glass Steagall in its original form.
4.) Continue with the real antitrust breakup as it was historically done.
-Airplane

[Jerry442]

14. The banks ARE nationalized, for all practical purposes.

Considering how the Fed has supported them by loaning them huge amounts of money on terms that look remarkably like giving it to them for free. In addition, the Fed let them stay "solvent" by carrying nearly worthless assets on their books at full value. And then, to top it off, the government has apparently given every banker a get-out-of-jail-free card.

We've already nationalized the banks. We just did it in the most shoot-yourself-in-the-foot way you can imagine. Time to do it better.

[iamthebandfanman]

10. i can think of a ton of companies

that need to be broken up...

walmart...
ATT...

just to name a couple

[Selatius]

15. Health insurance companies, medical parts manufacturers, and hospital conglomerates.

Smash them all as the monopolies they are. You'll see a fairly significant drop in health care prices once cartel-like activity and price fixing is halted. People go into medical bankruptcy because of the exorbitant prices. In the area of health care, anti-trust laws are virtually non-existent.