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Bernanke to Congress: About 25 firms are systemically significant. Oh, by the way, "virtually...

Bernanke to Congress: About 25 firms are systemically significant. Oh, by the way, "virtually all" are organized as bank holding companies, which means the Fed already happens to be their supervisor and lender of last resort.
Comments (7)
  • PassingBy55
    , contributor
    Comments (58) | Send Message
     
    I vote we consolidate them all into 1 company so the system is more sound
    24 Jul 2009, 02:43 PM Reply Like
  • Mashuri
    , contributor
    Comments (55) | Send Message
     
    Because monopolies are always better than cartels... ;)

     

    On Jul 24 02:43 PM PassingBy55 wrote:

     

    > I vote we consolidate them all into 1 company so the system is more
    > sound
    24 Jul 2009, 02:48 PM Reply Like
  • Neil459
    , contributor
    Comments (2644) | Send Message
     
    What better way to lose our freedoms than a bunch of dogooders saying something is too valuable to fail. Will its not! Our government is not too important to fail, our President is not too important to fail, our institutions are not too important to fail.

     

    Unless of course your goal is a dictatorship or elite regime.
    24 Jul 2009, 02:54 PM Reply Like
  • Econpro
    , contributor
    Comments (38) | Send Message
     
    uh...hello...read the text....they already are consolidated in to one company...its called the Federal Reserve
    24 Jul 2009, 02:56 PM Reply Like
  • CautiousInvestor
    , contributor
    Comments (3062) | Send Message
     
    As all of us on SA I've read so much about this my head is about to split.

     

    One of the more interesting moral hazard arguments is that by granting the TBTF banks an implicit guarantee, other may take excessive risk to join the club that is backstopped by the US. Heads I win, tails we lose; we don't socialize either ownership or gains, only losses.

     

    TBTF, however, may carry a price in the form of higher capital requirements, lower leverage and higher FDIC fees. As cash and capital are the ultimate damage control buffers and these twent five pose systemic risk, I believe higher capital requirements are both appropriate and needed.

     

    However it works out there should be cost in being TBTF as it's a gold plated insurance program that should carry a price.

     

    24 Jul 2009, 03:01 PM Reply Like
  • Illusional Delusion
    , contributor
    Comments (346) | Send Message
     
    If they are willing to apply that restriction, which will hurt profits in some ways...

     

    On Jul 24 03:01 PM CautiousInvestor wrote:

     

    > As all of us on SA I've read so much about this my head is about
    24 Jul 2009, 04:07 PM Reply Like
  • herbert hoover
    , contributor
    Comments (2005) | Send Message
     
    If there are 25 of them that are TBTF, then there seems to be enough competition around to allow a couple of these gangsters to go under
    24 Jul 2009, 08:29 PM Reply Like
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