Advertisement

Find answers, ask questions, and connect with our community around the world.

  • Bank Regulation

    Posted by btomba_77 on February 18, 2016 at 5:27 am

    … like nuclear plants.
     
     
    [url=http://www.foxbusiness.com/markets/2016/02/16/minneapolis-fed-chief-compares-big-banks-to-nuclear-power-plants.html]Minneapolis Fed Chief Neel Kashkari Compares Big Banks to Nuclear Power Plants[/url]

    I believe the biggest banks are still too big to fail (TBTF) and continue to pose a significant, ongoing risk to our economy, Kashkari said in prepared remarks during a speech at the Brookings Institution in Washington, D.C.  Now is the right time for Congress to consider going further than (banking reform legislation) Dodd-Frank with bold, transformational solutions to solve this problem once and for all.

    The options are: Breaking up the big banks; turning them into public utilities by forcing them to hold so much capital that they virtually cant fail (with regulation akin to that of a nuclear power plant); taxing leverage throughout the financial system to reduce systemic risks wherever they lie.

    Kashkari said the Minnesota Fed is launching a major initiative to create an actionable plan that would end too big to fail banks. The plan will be made public by the end of the year, but Kashkari conceded that Congress has the final call over too big to fail.  Ultimately Congress must decide whether such a transformational restructuring of our financial system is justified in order to mitigate the ongoing risks posed by large banks, he said.

    Well said.  Go get ’em Neel.

    btomba_77 replied 1 year, 2 months ago 2 Members · 9 Replies
  • 9 Replies
  • kaldridgewv2211

    Member
    February 18, 2016 at 12:11 pm

    interesting.  I find the Fed to be an interesting organization.  The article you site says Congress has final call, but really the Fed is made up of private member banks, who elect their boards.  So it’s not really a government institution.  So couldn’t they really police themselves if they wanted?  If you actually google something like “who are the member banks of the Cleveland Fed” it doesn’t seem to return results of who owns the shares.  It will only ever show who’s a board member.  As far as I can tell.
     
    It’s almost like they’re an enigma wrapped in a question mark.  This is from Cleveland Fed’s site.  We’re an independent entity within government, can they be?
     
    “Contrary to common misperception, the Cleveland Feds employees are not government employees. The Federal Reserve is an independent entity within government. It is not owned by anyone and is not a private, profit-making institution.”
     
    The St Louis Fed says this on their site.
     
    “The Federal Reserve Banks are [i]not[/i] a part of the federal government, but they exist because of an act of Congress. Their purpose is to serve the public. So is the Fed [i]private[/i] or [i]public?[/i] 

    The answer is [i]both.[/i] While the Board of Governors is an independent government agency, the Federal Reserve Banks are set up like private corporations. Member banks hold stock in the Federal Reserve Banks and earn dividends. Holding this stock does not carry with it the control and financial interest given to holders of common stock in for-profit organizations. The stock may not be sold or pledged as collateral for loans. Member banks also appoint six of the nine members of each Bank’s board of directors. ”

    • btomba_77

      Member
      May 26, 2021 at 4:28 am

      [link=https://thehill.com/policy/finance/555291-warren-urges-biden-to-replace-feds-quarles-in-testy-exchange?rl=1]https://thehill.com/policy/finance/555291-warren-urges-biden-to-replace-feds-quarles-in-testy-exchange?rl=1[/link]
      [h1]Warren urges Biden to replace Fed’s Trump- Appointed Bank Supervisor in testy exchange[/h1]

      “Your term as chair is up in five months, and [b]our financial system will be safer when you are gone,[/b]” she told {Federal Reserve Vice Chairman for Supervision Randal} Quarles during a testy exchange at a Senate Banking Committee hearing on the Federal Reserve’s regulation of the financial system.

      “I urge President Biden to fill your role with someone who will actually keep our financial system safe,” she said.

      “Look, we dodged a bullet with the Archegos collapse this time, but what slipped through the net by regulators to contain these losses when things go wrong was relatively small to what could have slipped through,” she said.

      [/QUOTE]
       

      • btomba_77

        Member
        November 30, 2021 at 9:20 am

        [b]Biden Mulls Cordray as Top Fed Banking Regulator[/b][/h1]  
         
        President Biden is considering Richard Cordray, the first director of the Consumer Financial Protection Bureau, to serve as the Federal Reserves top banking regulator, the [link=https://www.wsj.com/articles/white-house-considering-richard-cordray-as-top-fed-banking-regulator-11638285603]Wall Street Journal[/link] reports.

         

        • kaldridgewv2211

          Member
          November 30, 2021 at 10:19 am

          I think he’s a good pick.  He got railroaded by the Trumpsters because who needs consumer protection.

          • btomba_77

            Member
            January 1, 2022 at 6:57 am

            [link=https://politicalwire.com/2021/12/31/trump-appointed-fdic-chief-suddenly-quits/]https://politicalwire.com…-chief-suddenly-quits/[/link]

            [h2][b]FDICs Trump-appointed GOP chair to resign after partisan brawl[/b][/h2]

            Earlier this month, the Democratic majority on the FDICs board voted to take public feedback on potential changes to the agencys bank merger approval process. McWilliams did not participate in the vote, and the FDIC in an official statement said the action was not valid. A legal debate ensued over whether a majority of the board can put items up for a vote without the consent of the chair, with Democrats maintaining they had clear authority.

            For now, {Martin} Gruenberg, who has been serving at the FDIC[b] [/b]on an expired term for three years, gets to retake the gavel. The Obama-era chair of the agency took the unusual step of staying on as a board member after his leadership role ended and then dissented regularly against actions by McWilliams to loosen rules on banks of all sizes. McWilliams departure could lead to the reversal of some of those moves. Gruenberg first joined the FDICs board in 2005, after serving as an aide to former Sen. Paul Sarbanes (D-Md.)

            Gruenberg is also expected to be more aggressive in pushing banks to prepare for risks posed by climate change, an area where the outgoing chairman has hesitantly engaged. McWilliams abstained from a vote at the Financial Stability Oversight Council, a Treasury Department-led panel of regulatory chiefs, on a report that called climate change an emerging risk to the financial system, saying the documents conclusions warranted more research.

            [/QUOTE]
             

            • btomba_77

              Member
              January 1, 2022 at 7:02 am

              pro-regulation forces like it:

              [link=https://twitter.com/openmarkets/status/1477038073787654158]https://twitter.com/openm…us/1477038073787654158[/link]

              “After trying & failing to subvert a democratic vote of the FDIC Board to review bank merger policy, FDIC Chair & former bank executive Jelena McWilliams has announced her resignation. This welcome news means the FDIC board can get to work mitigating the risks of Too Big to Fail”

              • btomba_77

                Member
                October 20, 2022 at 4:44 am

                [link=https://www.politico.com/news/2022/10/19/appeals-court-cfpb-unconstitutional-00062626]Appeals court finds CFPB funding unconstitutional

                [/link]

                An appeals court on Wednesday ruled that the Consumer Financial Protection Bureaus funding mechanism is unconstitutional, in a victory for lenders that have targeted the agencys structure in a years-long bid to tamp down regulation.
                 
                A three-judge panel of the 5th U.S. Circuit Court of Appeals ruled that the design of the CFPB violated the Constitution because it receives funding through the Federal Reserve, rather than appropriations legislation passed by Congress. Democrats established the structure when they created the CFPB in the 2010 Dodd-Frank law as a way to shield the bureau from political pressures that could impact its oversight of the finance industry.
                 
                The appeals court ruling marked the latest victory for the finance industry, which has fought for years in Congress and the courts to blunt the CFPBs reach and limit its ability to police financial services. Republican lawmakers have also worked for years to stifle the CFPB and revamp its structure, arguing the agency lacks accountability.

                [/QUOTE]
                 

                • kaldridgewv2211

                  Member
                  October 20, 2022 at 6:14 am

                  Good chance for the legislature to just go scorched earth on the banking sector and put in some toothy regulation.  Clamp down on predatory lending.  Make sure Jamie Dimon needs to maintain a rainy day fund.

                  • btomba_77

                    Member
                    February 27, 2023 at 8:37 am

                    [h1][b]Supreme Court to Take Up Fate of CFPB[/b][/h1]  
                    The Supreme Court agreed on Monday to hear a case that could hobble the Consumer Financial Protection Bureau and advance a key project of the conservative legal movement: to limit the power of independent agencies, the [link=https://www.nytimes.com/2023/02/27/us/supreme-court-cfpb-consumer-watchdog.html]New York Times[/link] reports.
                     
                    A ruling against the bureau, created as part of the 2010 Dodd-Frank Act after the financial crisis, could cast doubt on every regulation and enforcement action it took in the dozen years of its existence.
                     
                    The central question in the case, Consumer Financial Protection Bureau v. Community Financial Services Association of America, No. 22-448, is whether the way Congress chose to fund the agency violated the Appropriations Clause of the Constitution, which says that no money shall be drawn from the Treasury, but in consequence of appropriations made by law.’