US prepares to push for global capital rules, page 1
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Topic started on 25-4-2010 @ 09:32 PM by leo123
www.ft.com...
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I don't think the focus should be mainly on capital ratios, it should be on the overall fundamentals of the banking system. (Not that capital ratios aren't critical!)
In my humble opinion this isn't brain surgery here, they have to get back to the basics but they are unlikely to have the political will to do so because to get back to banking basics, they are going to have to unwind the massive debt leveraged mess created by deregulation and it will result in one HELL of a lot of carnage. That said, I feel it is inevitable.
1) Bring back the Glass–Steagall Act, it was there for a reason and it worked. Banks have no business having divisions that significantly increase the risk to their capital ratio levels due to undue speculative risk.
en.wikipedia.org...–Steagall_Act
2) Unsuspend the "Mark to Market" rule. This was just another failed bailout attempt by suspending this rule. Namely, by not forcing banks to keep the current resale value of the mortgages they have on their books has allowed thousands of banks who are and have been bankrupt for some time to remain in business. It is quite literally, "living a lie", and is in effect a quazi ponzi scheme promoted and supported by the US government. They are broke, there is no getting around that and it is not going away.
en.wikipedia.org...
3) You fail, you fail, enough said? I don't care HOW big you are, bailing out failed financial institutions is not a solution - it's just a band-aide on a cancer that is not going away. Creating the proper foundation IS the solution.
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I could go on and on, but here's a starter and it quite obviously is not going to be pretty. The US banking system needs to be rebuilt from the ground up, and it will take balls - BIG balls.
[edit on 25-4-2010 by leo123]
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I don't think the focus should be mainly on capital ratios, it should be on the overall fundamentals of the banking system. (Not that capital ratios aren't critical!)
In my humble opinion this isn't brain surgery here, they have to get back to the basics but they are unlikely to have the political will to do so because to get back to banking basics, they are going to have to unwind the massive debt leveraged mess created by deregulation and it will result in one HELL of a lot of carnage. That said, I feel it is inevitable.
1) Bring back the Glass–Steagall Act, it was there for a reason and it worked. Banks have no business having divisions that significantly increase the risk to their capital ratio levels due to undue speculative risk.
en.wikipedia.org...–Steagall_Act
2) Unsuspend the "Mark to Market" rule. This was just another failed bailout attempt by suspending this rule. Namely, by not forcing banks to keep the current resale value of the mortgages they have on their books has allowed thousands of banks who are and have been bankrupt for some time to remain in business. It is quite literally, "living a lie", and is in effect a quazi ponzi scheme promoted and supported by the US government. They are broke, there is no getting around that and it is not going away.
en.wikipedia.org...
3) You fail, you fail, enough said? I don't care HOW big you are, bailing out failed financial institutions is not a solution - it's just a band-aide on a cancer that is not going away. Creating the proper foundation IS the solution.
===
I could go on and on, but here's a starter and it quite obviously is not going to be pretty. The US banking system needs to be rebuilt from the ground up, and it will take balls - BIG balls.
[edit on 25-4-2010 by leo123]
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