While you are damning Dems for their bail-out, why don't you consider damning Pubs for theirs (I know, I know, you can write that off as Bush with whom you did not agree either and now you look towards a new and glorious day without Obama in the oval officek, but you're likely to cast a lot of aspersions at Mitt as well, of course disavowing his actions with which you don't agree, when it suits you.
See http://www.nytimes.com/2012/10/14/business/sheila-bairs-big-questions-about-bank-bailouts.html?ref=books&_r=0
But perhaps the most telling anecdote is from early October 2008, when Henry M. Paulson Jr., the Treasury secretary, summoned Ms. Bair to his office. No reason was given for the meeting. When she arrived, Ben S. Bernanke, the Federal Reserve chairman, was already there. Timothy F. Geithner, then the president of the New York Fed, was on the phone.
Handed a piece of paper, Ms. Bair saw that she had been ambushed. It was a script, prepared for her by the Treasury and the Fed, stating that the F.D.I.C. was moving to guarantee all the liabilities in the financial system. Astonishingly, the guarantee would cover all bank depositors and even protect unsecured claims against institutions. In short, the F.D.I.C. was being asked to back “everybody against everything in the $13 trillion banking system,” Ms. Bair writes.
Dumbfounded, she told the men she had to discuss the plan with the F.D.I.C. board. Over a few days, they came up with a better, less costly plan.
If she had gone along, Ms. Bair said in an interview last week, “everyone who held bank debt would have immediately gotten a windfall profit,” as their bonds and other bank securities rose in value on the F.D.I.C. backing. “Of course, I wasn’t going to do that,” she adds, “and we ended up with a program that only guaranteed the renewal of expiring debt, which is where the problem was. And we charged a fee.”
Ms. Bair didn’t know it at the time, but this was the first of many situations when the Treasury and the Fed hoped to leave the F.D.I.C. holding the bag. She objected as often as she could, viewing these moves as attempts to assign responsibility for egregious behavior to hundreds of smaller institutions that did nothing to bring about the crisis.
The other disturbing theme in Ms. Bair’s book involves favored treatment given to Citibank and its parent by top regulators. Even as the bank racked up billions in losses on its mortgage and derivatives businesses in 2007 and 2008, Ms. Bair writes, no meaningful supervisory measures were taken against Citi by either the Office of the Comptroller of the Currency or the New York Fed, its main regulators.
You're absolutely correct that W, on whose watch these developments occurred, was no consistent conservative, so it blow an irreparable hole in any idea that LITD finds the developments defensible in any way.
Small and local is always better, and certainly so in banking.
While you are damning Dems for their bail-out, why don't you consider damning Pubs for theirs (I know, I know, you can write that off as Bush with whom you did not agree either and now you look towards a new and glorious day without Obama in the oval officek, but you're likely to cast a lot of aspersions at Mitt as well, of course disavowing his actions with which you don't agree, when it suits you.
ReplyDeleteSee http://www.nytimes.com/2012/10/14/business/sheila-bairs-big-questions-about-bank-bailouts.html?ref=books&_r=0
But perhaps the most telling anecdote is from early October 2008, when Henry M. Paulson Jr., the Treasury secretary, summoned Ms. Bair to his office. No reason was given for the meeting. When she arrived, Ben S. Bernanke, the Federal Reserve chairman, was already there. Timothy F. Geithner, then the president of the New York Fed, was on the phone.
Handed a piece of paper, Ms. Bair saw that she had been ambushed. It was a script, prepared for her by the Treasury and the Fed, stating that the F.D.I.C. was moving to guarantee all the liabilities in the financial system. Astonishingly, the guarantee would cover all bank depositors and even protect unsecured claims against institutions. In short, the F.D.I.C. was being asked to back “everybody against everything in the $13 trillion banking system,” Ms. Bair writes.
Dumbfounded, she told the men she had to discuss the plan with the F.D.I.C. board. Over a few days, they came up with a better, less costly plan.
If she had gone along, Ms. Bair said in an interview last week, “everyone who held bank debt would have immediately gotten a windfall profit,” as their bonds and other bank securities rose in value on the F.D.I.C. backing. “Of course, I wasn’t going to do that,” she adds, “and we ended up with a program that only guaranteed the renewal of expiring debt, which is where the problem was. And we charged a fee.”
Ms. Bair didn’t know it at the time, but this was the first of many situations when the Treasury and the Fed hoped to leave the F.D.I.C. holding the bag. She objected as often as she could, viewing these moves as attempts to assign responsibility for egregious behavior to hundreds of smaller institutions that did nothing to bring about the crisis.
The other disturbing theme in Ms. Bair’s book involves favored treatment given to Citibank and its parent by top regulators. Even as the bank racked up billions in losses on its mortgage and derivatives businesses in 2007 and 2008, Ms. Bair writes, no meaningful supervisory measures were taken against Citi by either the Office of the Comptroller of the Currency or the New York Fed, its main regulators.
You're absolutely correct that W, on whose watch these developments occurred, was no consistent conservative, so it blow an irreparable hole in any idea that LITD finds the developments defensible in any way.
ReplyDeleteSmall and local is always better, and certainly so in banking.