PineTarSplinters

GMAC, the Fed, and Moral Hazard

Consumers have much to celebrate as a result of the highly questionable action of the Fed granting a bank charter to GMAC. As a result, how can any bank regulator address the board of any bank that is going through a troubled period and demand that shareholders inject additional capital or face closure by the FDIC. If I was on such a Board, I would be quick to point out that there is precidence where an entity was granted a bank charter AT ITS INCEPTION WITHOUT MEETING THE MINIMUM CAPITAL REQUIREMENTS SPECIFIED BY THE FED.

On Dec 30 01:11 PM morph366 wrote:

> Sordid yes, surprising no.
> We should get used to seeing even more of these accomodations to
> strategic bond buyers like PIMCO in the future