At Long Last, Bernanke Acts

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Finally! For too long, Ben Bernanke and the Fed have been talking and acting as if our greatest risk were inflation, as if the dollar were a delicate flower and America were in danger of becoming Zimbabwe.  With new monetary stimulus and bold rhetoric to accompany it, the Fed has made it clear that our greatest risk is stagnation, that the dollar is fine and America’s real danger is becoming Europe.

Ever since Bernanke’s whatever-it-takes lending spree after the financial collapse of 2008, the Fed has virtually ignored the second half of its dual mandate to stabilize prices and maximize employment. It has focused on the hypothetical risk of future inflation — even though the inflation rate was below its unofficial target of 2% — while doing little about a joblessness rate that has festered above 8%. The Fed’s QE3 purchases of mortgage-backed securities that Bernanke announced yesterday, along with a promise to keep buying as long as the economy needs support, are its most aggressive move since the chaos of the meltdown subsided.

(PHOTOS: Political Pictures of the Week, Sept. 7-14)

In the past, Bernanke has suggested that fiscal stimulus from Congress would be a more effective response to the slack economy than monetary stimulus from the Fed, and he had a point. Congress can pour money directly into the wallets of consumers and the coffers of businesses through tax rebates, safety-net programs and public works; the Fed pumps money into banks that won’t lend unless there’s already demand in the economy. And with interest rates at historic lows, the U.S. government can essentially borrow the money to inject fiscal stimulus for free.

But Congress hasn’t acted. Specifically, congressional Republicans have refused to act. President Obama pushed a jobs bill that would have provided more stimulus through tax cuts, infrastructure projects and other spending, but it was dead on arrival in the GOP-controlled House. In fact, Republicans have called for immediate austerity, the strategy that has produced double-dip recessions in Spain and England. Obama has refused to go along with that, so the result has been stalemate: no stimulus, no antistimulus, just the same unacceptably weak recovery.

On Thursday, Bernanke made it clear that the Fed was acting because Congress would not and that the Fed would continue to provide support until the recovery strengthens. It’s about time. The tight-money inflation hawks who have been consistently predicting runs on the dollar have been consistently wrong. Sure, it’s possible that the Fed’s latest loosening could produce a bit of inflation; as I’ve written, that would be a good thing, encouraging consumer spending and business investment. And if inflation did start to spike to levels of concern, the Fed could always adopt a tighter policy, taking away the proverbial punch bowl.

That said, if the hawks tend to exaggerate the potential risks of monetary stimulus, doves tend to exaggerate the potential benefits. Liquidity is not the main problem with our economy right now. Firing up the printing presses — and making clear that they would continue to run indefinitely — would help juice the stock market and further stabilize the financial sector, but it won’t miraculously revive demand. Bernanke is right to try to keep us from becoming Europe, but we’ve still got problems of our own, and no amount of QE’ing will fix them.

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ahandout
ahandout

Shepardwong, your statement contradicts itself.

Businesses expand to meet existing demand not in anticipation of

possible future demand or regulatory burden. And if a business is ready

to expand to meet present (or even future) demand, they know exactly

what their borrowing is going to cost them on day one. You're bending

reality to fit your irrational and repeatedly disproved dogma.

A company had better have a plan for future growth if it is borrowing money to expand.  It would be foolish to borrow money for the purpose of remaining static, don't you think?  Ever hear of a growth projection?

Read more: http://swampland.time.com/2012...

La_Randy
La_Randy

After all, we all know it is about demand.

What have republicans done to address that?

ahandout
ahandout

Michael what is your financial background?  You have any idea of the history of printing money?  Why do you think that commodities are going higher and higher? 

ifthethunderdontgetya™³²®©
ifthethunderdontgetya™³²®©

It would have been better to have the Federal government invest in large infrastructure projects, and put people to work directly.

Of course, the Republicans would have none of that, because they want to sabotage the American economy for partisan gains.

Why do guys hate America, ahandout?

~

ahandout
ahandout

Obama already passed out billions for those ready to shovel Bullsh t jobs.

Why do you support a lying POS?

No amount of fiscal stimulus can overcome the ball and chain of Obamacare.

Pnnto
Pnnto

Speaking of the economy I see that a judge has struck down Wisconsin's law that restricted public employees right to collectively bargain. 

Shocking that a republican governor would push through an unconstitutional law. 

Benevolent Lawyer
Benevolent Lawyer

Please let me know where you read it. I would like to read the full text of the case. Thanks.

Fatesrider
Fatesrider

I can't really see this as a good thing.  Printing more money and under-writing its values on the bond market is more risky than it sounds.   Forty billion a month isn't enough to do it unless the money is going into the pockets of people who will spend that money on goods and services.  We don't need new businesses.  We need new jobs for the businesses we have now

It's economics 101.  Making money available for businesses to stimulate growth ONLY works when there is more money in the pockets of people than they need for day to day living OR you're selling to governmental organizations who have the cash to buy what the recapitalized business is offering.  Basic supply and demand stuff.  No matter what the supply may be, it's demand that creates jobs.  Demand is generated strictly through the sales of goods and services - money going to the businesses from customers.  That money is used to upgrade, hire, improve and otherwise stimulate the business.  That doesn't come from the top-down (investments) because businesses estimate their work-force needs not from how well capitalized they are, but from how many people are buying what they sell.

Businesses are seeing record profits because they're getting a lot of investment money, but demand remains sluggish.  And without that demand infusing money into the business from the bottom up, businesses do not hire new people.

It doesn't sound like this money is going to the bottom-up people.  The fallacy of the argument in the article that this is a good move is in this line: "Sure, it’s possible that the Fed’s latest loosening could produce a bit of inflation; as I’ve written, that would be a good thing, encouraging consumer spending and business investment."

Here's the reason it's a fallacious argument: Consumers have no money.  Investment in business during an economic downturn doesn't create new jobs when the customers have no money to spend on whatever it is the business does because, as I said, businesses don't create jobs because they have the money.  They do it because there is demand for what they sell.

Top-down economics doesn't work unless the lubrication of the economic engine is flowing from the bottom up and when money is already tight, people aren't spending it in ways that stimulate the upward flow.

THAT'S why I think this isn't a good idea.  If we cut taxes on the poor and middle-class and offset those tax cuts with increases on the wealthy (and eliminated the income cap on social security) the economy would be stimulated in a bottom-up manner that leads to a sustainable economic growth because it addresses the fundamental way a capitalist economy works - and doesn't have to risk printing more poorly-supported money in a risky and ultimately futile attempt to stimulate the economy to do it.

This scheme will fail.  That's my prediction.  Whether catastrophically or not, it won't do what it's intended to do because it fails to address the actual economic conditions in a relevant and effective manner.

Bill Pearlman
Bill Pearlman

QE 3 is yet another subsidy  for the financial sector. Its killing savers and people that actually have to go to the supermarket and the gas station. Evidently something that Grunwald doesn't do.

Ivy_B
Ivy_B

See his cover story in the current issue of TIME where he details the subsidized life we all lead. 

1Todd1
1Todd1

Bailing Out Obama

 

As the Obama Economy has reached its maximum output, and

that output has fallen short of what is needed to sustain growth, lower

unemployment and instill real consumer confidence, our Federal Reserve has

turned to our own national reserves and additionally begun to print monies to

bail out the failed economic efforts of the Obama Administration. By

comparison, as Goldman Sachs, Fannie Mae, Freddie Mac and AIG needed the

hundreds of billions of dollars along with the other hand-picked, exclusive

recipients of the TARP funds;  we can now

add the Obama Administration itself to the list, only it won't be paying the

taxpayer back. Ben Bernanke just has made the biggest politically charged

gamble ever by any of his 13 predecessor Fed Chairs that is poised to exceed

the maximum $850 billion of the TARP in just 19 short months at $40 billion a

month in bailout. However, Bernanke didn't wait the short 49 days for the

certainty of the results of a neck and neck Presidential General Election,

where a referendum on the economy is the key issue. Instead, he has delivered

what can only be construed as a Golden Calf to Barack Obama. The immediate

improvements to the consumer and investor bottom lines come at a time when they

are desperately needed, which only adds political fuel to the election fire, as

this artificial, cosmetic and temporary lift props up the tattered remains of a

lost hope and pocketed change '08 Obama campaign strategy.

In lieu of its self-serving and opportunistic timing,

Chairman Bernanke's sole decision to preempt and sway the 2012 Presidential Election

by prematurely instituting an indefinite third round of quantitative easing to

an economy that previously wasn't fixed by the first two rounds, does not come

without its costs. While it may directly benefit his boss, Barack Obama just

prior to his possible re-election, and as such, intentionally save his own seat

and job as Chairman of the Federal Reserve, the American Taxpayer is left

footing the bill. The bill being the immediate $40 billion a month compounded

with recovering from the certain long term inflationary costs this type of

extreme easing has proven to bring.

Like an aged alcoholic with a pickled liver having another

last drink at the Bar of Last Resorts would tell you-enjoy it while it lasts.

MrObvious
MrObvious

The feds shouldn't have to, but when we pay the congress critters to sit on their arses and spend more time wine and dine with campaign donor someone have to.

sacredh
sacredh

Have fun folks. I have to get ready and go to work. The guy I'm working with brought in some stuffed hot peppers last night for dinner. They were HOT! We were both sitting there sweating, noses running, eyes watering and both of us had the hiccups. We ate at 5 and I was still feeling stuffed at midnight.

AfGuyReturns
AfGuyReturns

Extra points if you can work in a "Blazing Saddles" and Madeline Kahn reference, ER...

ERenger
ERenger

Fair warning --- they get you both coming and going! 

georgiamd
georgiamd

"Firing up the printing presses — and making clear that they would continue to run indefinitely"

The solution to our staggering 16 trillion dollar debt is to print even MORE money? Consequently ignoring the increased potential for inflation, or even hyperinflation.

The many

parallels between 1924 Germany and present-day United States are

cause for concern;

Up until recently, the United

States enjoyed a strong world-wide demand for its government paper.

Thus, the negative affects of government deficits have been subdued.

Now, with consistently low interest rates, and a growing fear

globally that U.S. deficits may have run out of control, foreign

support for the U.S. bond market has faltered. In the absence

of international buyers, the Fed could be forced to monetize an

ever larger portions of the debt -- the modern equivalent of printing

money.

Whether or not the situation

will slip out of control is a matter for debate. The trend, however,

is alarming.

It would be worthwhile to remember:

Inflation is regressive in effect in the sense that it hits hard those

who are already weak and cannot protect themselves. It is specially the

middle class which suffers most due to inflation.

Yoshi_1
Yoshi_1

 Too bad all the banking cartel can do is follow the policy of failed states and banana republics. Print more money. It hasn't worked, so far. What else do they have?  Hmmmm. Nothing.... There you have it.

 The icing on the cake would be to bring on the "scene-completing" STAGFLATION. Then we'd be in full "Carter-mode".......

Just a few observations.......

deconstructiva
deconstructiva

"The solution to our staggering 16 trillion dollar debt is to print even MORE money?"

.

Drink!

ahandout
ahandout

 "Drink"

At least you have found one thing you are good at.

ERenger
ERenger

Actually, it is the middle class who are carrying tons of credit card debt and underwater mortgage debt. They are struggling to de-leverage, paying down debt rather than spending in the economy. This is a drag on the economy. Most of the middle class would be far better off with some mild inflation that would lower the real cost of the debt they are struggling under and would raise the value of their homes relative to their mortgages --- it would get their mortgage back above water and pay off their credit cards quicker. 

Fatesrider
Fatesrider

 Your point has merit, but I think the amount of inflation we'd have to have to make a credible difference to the middle-classes debt load would destroy the economy.  It's better to simply put money in their pockets than try to manipulate the rate of inflation.

The difference here is speed and risk.  A high-speed solution such as yours carries enormous risk which may or may not be containable or even controllable.   It's a high-risk maneuver that would HAVE to be throttled back and has no guarantee of sustainability over the long term.  And that money still has to be paid back.  One bond market lowered the U.S. credit rating again to AA- from AA today.  That drives up interest rates and increases the debt load of the U.S. itself.

But if taxes were cut on the middle class and poor (offset by tax increases on the wealthy), the infusion of that much cash over that large of a sector of the consuming market would have an immediate effect for those who are "making it" now and would bring aboard those who manage to pay off their debts once that task was done.  The results of the upturn would be slower, but based more solidly in economic reality.  Businesses are already well financed - at least the ones who would benefit from this current Fed maneuver.

Job growth doesn't come from a business having money alone.  No job has ever been created because of investments.  It comes from money coming from the bottom, up  - or the promise thereof.  A top-down approach to economic growth ignores how jobs are created in a business in the first place.  A business can have all the money in the world, but if people aren't buying what they're selling, that business isn't going to create any new jobs and will likely cut the ones it has.  There is no business ethic which tells a businessman that he has to keep employees he doesn't need to meet a nonexistent demand.

So while I agree that lowering the actual value of their loans would benefit the middle class debt load to some degree, the increased pressure on prices when real incomes (the value of the money people are getting) not only hasn't increased over the last 30 years, but has dropped between 35% and 66%.  Wagers don't keep pace with inflation.  That alone indicates higher inflation would significantly worsen the economic climate because people could no longer afford to buy what they can afford to buy now.  Less demand.  More job losses.

I still foresee this as failing.  I don't see it as a good thing.  I can't say whether it will be a catastrophe, a disaster, a downturn or have no impact at all, but I strongly suspect it will not be good for us in the long-term simply because it ignores capitalist economic realities in favor of an economic approach (top-down) which has been repeatedly proven doesn't work.

Winston Blake
Winston Blake

Economic growth is not the growth of public debt.

This exponential growth curve model is doomed to failure on many fronts.

La_Randy
La_Randy

Links Please! Especially the one showing that the "U.S. bond market has faltered".

georgiamd
georgiamd

 The dollar is held by foreign governments who have an excess of dollars,

which they hold in foreign currency reserves. The excess happens when

countries, such as Japan and China,

export more than they import. As the dollar declines, the value of

their reserves also decline. As a result, they are less willing to hold

dollars in reserve. They diversify into other currencies, such as the

euro or even the Chinese yuan. This reduces demand for the dollar, putting further downward pressure on its value.

Bond Market Flashes Inflation Alert - WSJ.comThe U.S. bond market has begun sending a message that inflation risks are rising and the Federal Reserve may be too slow to act, potentially marking a ...online.wsj.com/article/SB... - CachedMore results from online.wsj.com »

La_Randy
La_Randy

Your link to the wall street journal's homepage does not support your assertions.

bcfred
bcfred

The author buries the most important element of the story in the final paragraphs - borrowing costs are decidedly NOT the problem holding back a recovery.  We've been at historically low rates for almost four years with no measurable benefit. Until businesses have visibility into exactly how the barrage of new regulations and laws (most of which are still being written) are going to affect them they will be hesitant to invest and hire; thus no new loan demand regardless of interest rates.  Meanwhile the Fed buys MBS of questionable credit quality that may put it in the same position as the banks that first bought them during the credit bubble.  This is a risky move with limited potential reward.

vstillwell
vstillwell

Barrage of regulations? What regs? Are you a hedge fund manager? The only regs that have been passed deal with Wall Street and health insurance. That's it. More blah blah blah from a conservative baby boomer. No solutions from you people. Just more of the same. Don't worry, your goodies are safe. The rest of us not so much. 

shepherdwong
shepherdwong

"Until businesses have visibility into exactly how the barrage of new regulations and laws (most of which are still being written) are going to affect them they will be hesitant to invest and hire..."

Right, businesses are turning away customers, business and profits because they're too worried about how future regulations might affect them. How forward looking of them. You're far too brainwashed an idiot to be lecturing the author of this post.

bcfred
bcfred

Hardly.  I work with small businesses every day and this is exactly what the owners and managers say.  They will take the opportunity that is right in front of them, but they're certainly not borrowing for expansion purposes until they know how much all this is going to cost them.  Tell you what - I'm not going to tell you how much you're going to earn next year or the year after, but here's a cheap mortgage for a nice big house.  What, you don't want to make that commitment without being sure you can service the debt?!  Well I never!

Benevolent Lawyer
Benevolent Lawyer

Please let me know where you got this information about the ACA increasing Healthcare costs. These costs increase every year, and the ACA has started to rein them in.

I am fascinated by the ACA and have studied it for a while. I want to know some specifics to support your claim.

Pnnto
Pnnto

Fred, firstly thanks for the response.

You said that the small businesses you work with were worried about  ACA. I am curious about how you are defining small businesses.

25 or fewer employees, average wage less than 50.000, gets a company a tax credit not a tax increase.

http://www.healthcare.gov/law/...

Are the companies you work with larger than that or are they unaware of the law's implications for them?

bcfred
bcfred

Pnnto - I think you can deduce from my list that it's not just one thing; it's a laundry list because there's a lot to worry about.  But if you want the simplest example let's go with Obamacare.  The estimated cost of providing health insurance is expected to go up anywhere from 10-20% (this is already showing up in premiums).  On top of the $10k+ this can cost already, that adds up.  So if a manufacturer is experiencing increased demand he is much more likely to work his existing people longer hours and pay overtime than hire somebody new.  This is compounded by the increasing cost of unemployment insurance taxes.  If someone is hired and later let go, that creates an expense as well.  The company is much better off maintaining maximum flexibility by varying hours in the existing workforce than hiring new people.  Now extrapolate this across all hourly wage industries and you can see the issue, including why unemployment remains high. 

And to the guy below - I'm not middle aged, a boomer or a hedge fund manager.

shepherdwong
shepherdwong

"Specifically which regulations are the small businesses you work with worried about."

The usual "conservative" boogeymen. But only when Democrats are in the White House or controlling Congress (even though Republicans are usually the real boogeymen relative to their list of apostasies (debt., regulation, cost of health care, etc.). Since the 80s.

Pnnto
Pnnto

Okay that's not what I asked. 

I asked what specifically were the regulations that the small businesses you work with every day were worried about and you provide a laundry list. 

I'm starting to get the feeling you either really don't work with small businesses or, less likely, these small businesses are that scattershot with their longterm planning which would mean that future regulations are the least of their problems. 

shepherdwong
shepherdwong

" I work with small businesses every day and this is exactly what the owners and managers say."

So do I and talk is cheap, especially when it comes from Republicans. But even my Republican clients take every piece of business they can find and do whatever it takes to do it.

"They will take the opportunity that is right in front of them, but they're certainly not borrowing for expansion purposes until they know how much all this is going to cost them."

Businesses expand to meet existing demand not in anticipation of possible future demand or regulatory burden. And if a business is ready to expand to meet present (or even future) demand, they know exactly what their borrowing is going to cost them on day one. You're bending reality to fit your irrational and repeatedly disproved dogma.

bcfred
bcfred

1.  The cost of providing health care is going to continue increasing

2.  If they manufacture, transport or use a lot of energy the EPA naming carbon a pollutant is likely to drive up costs

3. Perpetual low rates ARE driving up input costs - fuel and food especially

4.  Record number of major regulations passed (national compliance cost of $100 million or more)

5.  The reward for taking the risk of being a business owner will be reduced if tax rates are allowed to increase

6.  We are building a Mount Everest of national debt that is likely to drive up tax rates further

This creates financial uncertainty for everyone in our economy.  Until we have long-term visibility from govt into what the rules of the road will be, don't expect anything different.

Pnnto
Pnnto

Specifically which regulations are the small businesses you work with worried about.

The issue with the company I work for is demand. Which seems to be the overriding concern for the vast majority of small businesses, not regulations. 

Ivy_B
Ivy_B

I've been hearing about uncertainty as the reason business won't hire for four years now.

Maybe if the obstructionists had not been determined to cut as many public sector jobs as possible we'd be getting a little more bang for the buck of increasing private sector jobs.

Most reasonable businesses will hire when there is more demand for their product. If demand were increased and they hesitated because of bogeyman regulations their competitors would take over their businesses.

For example, most small businesses will feel no significant effect of regulations that are being written to protect consumers from predatory lenders unless they are predatory lenders. If a business is hurt by stronger regulations on food safety, they need to consider their practices.

Goran Bajramovic
Goran Bajramovic

Demand will continue to fall as long as prices keep rising and salaries and employment stagnate or fall. Many companies prefer higher profit margin over increase in demand. This reduces their production and therefore hiring which further reduces demand. After the initial honeymoon, true effects of globalization are finally catching up with American consumer.

Winston Blake
Winston Blake

These mathematical  illiterates all base their economic model on an exponential growth curve...

Failure is a mathematical certainty.

bcfred
bcfred

There is no benefit to companies in hoarding cash at negative real interest rates.  Investing in growth is a much more lucrative prospect.  And the 'not interested in lowering prices' comment completely ignores the effects of market competition.  You think Best Buy wouldn't like to still be able to sell 40" flat screens for $2,000?  Why doesn't it?  Simple:  competition.  At the same time, consumers benefit from being able to buy that TV for $400.  Oh, and the cost of employing an individual has gone up, just less is paid in wages (though tax rates are down so take home is positively affected).  The rest is substantially higher benefits costs and unemployment insurance rates.  But to the employer that doesn't matter - it's all money regardless of who it's paid to.

bcfred
bcfred

That's because nothing but short-term, directed "solutions" have been enacted.  GM did not build more plants to address short-term demand from Cash for Clunkers.  Homebuilders did not staff up when the $8,000 first-time homebuyer tax credit was in place.  Both of these programs artificially brought forward demand (which subsequently slumped) and cost taxpayers billions.  No long-term changes to behavior, just an additional pile of debt.  And that's what the President is proposing to keep doing if reelected.  Should I expect a different outcome? 

shepherdwong
shepherdwong

"What DID happen is that the normal rules of bankruptcy priority were upended for political reasons.  GM was going to restructure through the bankruptcy process regardless..."

The "normal rules of bankruptcy priority were upended," because their wasn't a dime of private-sector money that was going to bale-out GM. That's why Obama had to save it with federal intervention. But you probably already knew that so shove your lying "facts" right up where the sun don't shine.

bcfred
bcfred

shep, please tell me you're implying Cash for Clunkers did that.  We both know it did not - all it did was move auto purchases up by a couple of months (data readily available).  What DID happen is that the normal rules of bankruptcy priority were upended for political reasons.  GM was going to restructure through the bankruptcy process regardless, which is what enabled it to emerge as the healthier company it is today.  Save your belligerence and stick to the facts.

shepherdwong
shepherdwong

"GM did not build more plants to address short-term demand from Cash for Clunkers...these programs artificially brought forward demand (which subsequently slumped) and cost taxpayers billions."

My god, you're a moron (and even too stupid to try to keep it hidden from public display).

January 20, 2012 Less than two years after emerging from bankruptcy, General Motors Co. has regained the title of the world's largest automaker. GM's worldwide sales rose 7.6% to 9 million vehicles in 2011. The Detroit manufacturer last held the top spot in 2007 before it was surpassed by Toyota Motor Corp. the next year.
http://articles.latimes.com/20...

jmac
jmac

Regulations are the problem?  The regulations that are being written are to try to keep banks from continuing their gambling as they went for profit (under the table with bundling and selling of toxic loans) over stability and almost took us to a Great Depression.   What regulation is Congress looking at that's stopping a business from growing?  

bcfred
bcfred

Banks did not 'gamble' for profit - they bought investment grade Fannie and Freddie bonds as approved (nay encouraged) by the Federal Reserve to hold as capital.  It was only when it became apparent that those securities were anything but investment grade that concerns over their financial health.  The investment banks that traded riskier securities for proprietary profit had nothing to do with the lending institutions, and two of them are no longer with us (Lehman, Bear Stearns).

bcfred
bcfred

shep, I'm neither an idiot nor a liar, but if calling me that makes you feel better then have at it.  Goldman Sachs is NOT A BANK and if you don't know the difference between a lending bank - deposits guaranteed by the FDIC, heavily regulated and audited regularly by the OCC - and an investment bank that underwrites securities, provides trading and Mamp;A advisory services and trades for its own accounts, then I think it's safe to say who in this debate doesn't know what he's talking about.

jmac
jmac

bcfred - Republicans had hearings on Fannie and Fred.  It's too bad no Republicans  tuned in.

shepherdwong
shepherdwong

"Banks did not 'gamble' for profit - they bought investment grade Fannie and Freddie bonds..."

Please stop posting your Republican propaganda here. You only expose yourself as a liar or an idiot (or, possibly, both).

The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO.
http://www.sec.gov/news/press/...

bcfred
bcfred

By all means - another regulation to provide a solution to a problem that doesn't exist.  Lending institutions are already legally separate entities from investment banking and securities platforms, even if they are owned by the same holding company.  If something goes wrong at another entity under that parent it doesn't make the bank any less secure.  Our banks - that is, the lenders as we think of them - do not suffer from a lack of oversight.

Goran Bajramovic
Goran Bajramovic

In order to protect banks from themselves, government should require separation of investment and retail banking.