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Dallas Fed President Richard Fisher yesterday called for the break up of a dozen too-big-to-fail...

Dallas Fed President Richard Fisher yesterday called for the break up of a dozen too-big-to-fail banks, each with assets of over $250B. While Fisher didn't name all 12, he showed a presentation slide with a list of the top five banks: JPMorgan (JPM), Bank of America (BAC), Goldman Sachs (GS), Citigroup (C) and Morgan Stanley (MS). Fisher believes his position is receiving rising support in the Fed and Congress.
Comments (8)
  • youngman442002
    , contributor
    Comments (5131) | Send Message
     
    Go man Go.....break em up....great for America...better for the world..bad for the politicians though...
    17 Jan 2013, 07:01 AM Reply Like
  • User 509088
    , contributor
    Comments (1021) | Send Message
     
    not so bad for politicians, for them it's like a split- their pay offs and contributions are multiplied by the number of new banks in the play.

     

    they're still the same beast, there's just more of them.
    17 Jan 2013, 07:39 AM Reply Like
  • Tony Petroski
    , contributor
    Comments (6373) | Send Message
     
    Four years too late. Now he is getting bold.

     

    The politics of this is delicious: The president, a man who now is able to rule on his own through "executive orders" has demonized "fat cats" and bankers and should be expected to get in front of this initiative. In fact he can't because he and his party have relied on those same Wall Street fatcats for campaign cash and jobs for loyal party members as "consultants."

     

    And the biggest Wall Street fatcat of all is none other than the Bumkin from Omaha, the Oracle of Wall Street. How will he play this one?
    17 Jan 2013, 07:14 AM Reply Like
  • wdillard
    , contributor
    Comments (2) | Send Message
     
    Richard Fisher for PRESIDENT! Too bad this guys is way to smart for Washington.....He's on target as usual regarding the Big Banks. Thank God he's got the guts to stand up and speak out on what most everyone believes.....Big is not Better...
    17 Jan 2013, 07:55 AM Reply Like
  • pfifla1
    , contributor
    Comments (500) | Send Message
     
    In some cases bigger is better - in others its not. Bigger can be a ticking time bomb if not managed properly. If you look at the total number of smaller institutions that failed during the crisis, the # would be staggering. Sure the banks in the US (sans JPM and GS) would have surely failed without gov't intervention, but with the infusion of cash helped stabilize things and since all the money has been paid back. I wish all the Gov'ts investments worked out like this, but most of the money just gets flushed down the toilet.

     

    in two words, DREAM ON, DREAM ON!

     

    Long JPM WFC GS
    17 Jan 2013, 08:07 AM Reply Like
  • DRD&Zack
    , contributor
    Comment (1) | Send Message
     
    As I understand it, a significant issue is how such breakups would affect US competitiveness throughout the world. Thoughts?
    17 Jan 2013, 08:15 AM Reply Like
  • Colin Doyle
    , contributor
    Comments (717) | Send Message
     
    So we break up the banks, and that is supposed to end TBTF--you know, get rid of the "Big" part--which means there won't be a sort of implied insurance policy under the big US financial institutions. In theory, this would reduce the value of bank debt. So then, maybe financial institutions could more cheaply deleverage if they were so inclined; and leverage on the balance sheet would be a bit less fruitful in terms of return on equity. What's the effect? Does this reduce lending, then?

     

    I mean if you really think about it, TBTF is just a big synthetic long position on the US. It's like selling a default swap tied to our financial institutions, and some might say the whole country by extension.
    17 Jan 2013, 08:39 AM Reply Like
  • lcmucci
    , contributor
    Comments (17) | Send Message
     
    How do you break up a bank? I guess Fisher is not a fixer upper, is his leg to stand on, the Whale episode? The banking industry today is not the same as the one before the crash. The rules are back in place and the industry is a lot safer now. The Whale incident left Jamie with a black eye. He's been taken down a few notches and he's watching over his shoulder now. I can understand his over confidence since he had seamlessly inter grated bankrupt WaMu with chase, It was a perfect fit. Who else could have done this better, the government? In a not so confident economy Chase was doing better then ever, raising dividends, buying back shares, a showcase leader in the banking world. Should we destroy this financial American asset or protect it with rules to live by and prosper.
    17 Jan 2013, 02:10 PM Reply Like
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