Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman

Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman

www.bloomberg.com

Sept. 13 (Bloomberg) -- Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc.

“In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview today in Paris. “The problems are worse than they were in 2007 before the crisis.”

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I'm pissed... Again.

I agree with him in his stating of the obvious. This is an issue of banks being deemed "too large to fail". The same issue that caused the bailouts last year and earlier this year that only lead to increasing the size of these banks.

A year after the demise of Lehman forced the Treasury Department to spend billions to shore up the financial system, Bank of America Corp.’s assets have grown and Citigroup Inc. remains intact. In the U.K., Lloyds Banking Group Plc, 43 percent owned by the government, has taken over the activities of HBOS Plc, and in France BNP Paribas SA now owns the Belgian and Luxembourg banking assets of insurer Fortis.

My jaded interpretation of what he says next is that the U.S. government are cowards and unable to to do their jobs so they will leave it to other countries to force legislation (or not) in our country to deal with these criminals. That will never happen either.

Stiglitz said the U.S. government is wary of challenging the financial industry because it is politically difficult, and that he hopes the Group of 20 leaders will cajole the U.S. into tougher action.

Why is it "politically difficult", Stiglitz? The American public wants this change and would embrace any politician who would attempt this. It is very obvious that people are fed up with too big to fail banks. The real reason it is "politically difficult" is that these banks have bought and now own our government officials. That's not politics, that's corruption!

“It’s an outrage,” especially “in the U.S. where we poured so much money into the banks,” Stiglitz said. “The administration seems very reluctant to do what is necessary. Yes they’ll do something, the question is: Will they do as much as required?”

Cowards! What will the Obama administration do?

While Obama wants to name some banks as “systemically important” and subject them to stricter oversight, his plan wouldn’t force them to shrink or simplify their structure.

Ok, so what you're saying, Obama, is that you want the government who you say is subservient to the banks (because you can't actually control them and have to rely on foreign countries to do this) to "regulate" their masters. Stop lying!!!!

“We’re going into an extended period of weak economy, of economic malaise,” Stiglitz said. The U.S. will “grow but not enough to offset the increase in the population,” he said, adding that “if workers do not have income, it’s very hard to see how the U.S. will generate the demand that the world economy needs.”

“The question then is who is going to finance the U.S. government,” Stiglitz said.

Good question there, Stiglitz.

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