I want the Rec's,
and to have the record of these events in my blog so I can find them.
This moring Milpo wrote this excellent post; "Repeal of The Glass-Steagall Act OR The Republican Orgy of Greed OR Sandy Weill-The "Good" Soldier" documenting the major events that led to "the creation and ultimate destruction of the Glass-Steagall Act" culminating in 1999 with Graham-Leach-Bliley. Go over there and give him a "rec" if you agree he deserves it.
The destruction of the US banking system at the expense of taxpayers and to the benfit of our debtholders continues today and I wanted to add these more recent events to his post.
SEC Chairpersons Paul Atkins, Cynthia Glassman, Harvey Goldschmid, William Donaldson, and Annette Nazareth unanimously voted to change the "Net Capital Rule" to exempt the investment firms of Bear Stearns, Merril Lynch, Goldman Sachs, Morgan Stanley and Lehman Brothers, to leverage in excess of the 12/1 restriction placed on all other firms because they were big enough to have the resources to not screw it up.
Beginning here is the story of how investment banks are allowed to use our Saving Accounts for high risk investments. Having used our taxes to backstop their investment losses the same players from the same investment firms are going after the savings accounts of responsible Americans with taxpayers once again backstopping the risk. The only way to stop this is to call your Representatives in Congress.
The only way to end the financial attacks on America is remove the investment bank's representatives from the FDIC, SEC and Federal Reserve along with the elected members of the Senate Banking Committee in favor of the independent activist watchdogs who have been reporting these events and bringing them to our attention.
The price of freedom is eternal vigilence. Call your Representative. (202) 224-3121
The (Federal Reserve) Board also adopted an interim final rule that provides a temporary exception to the limitations in section 23A of the Federal Reserve Act. It allows all insured depository institutions to provide liquidity to their affiliates for assets typically funded in the tri-party repo market. This exception expires on January 30, 2009, unless extended by the Board, and is subject to various conditions to promote safety and soundness.
This exemption allows combined Investment/banking institutions to transfer deposits from highly regulated FDIC guaranteed bank savings accounts to the lightly regulated investment sister bank. It means the combined bank can use your savings account money to invest in high risk equities and US treasuries will guarantee those losses at taxpayer expense should the bank and the FDIC be unable to pay. The bank gets the profit, the CEO gets the bonus, the taxpayer gets the risk.
Goldman Sachs and Morgan Stanley, the last two independent investment banks, will become bank holding companies, the Federal Reserve said Sunday night, a move that will fundamentally alter the landscape of Wall Street.
Now, Goldman and Morgan Stanley, which have been the subjects of merger speculation in recent weeks, can become direct competitors to larger firms like Citigroup, JPMorgan Chase and Bank of America. Those firms combine investment-banking operations with the larger capital cushions that come with retail deposits, giving them a stability that pure investment banks lack.
The FDIC raises its guarantee on bank deposits from $100k to $250k in order to encourage peole to leave deposits in banks. Should the bank funded FDIC fail to pay the guarantee the deposits are backstopped by the US Treasury (Taxpayer).
Board of Governors of the Federal Reserve System extends the sec 23a exemption until 10/30/2009. It also requires a risk profile no worse than that which existed in the member bank on 09/12/2008. (which I think is now considered to have been excessive risk?)
Senate Banking Committee Chairman Christopher Dodd is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department.
The Connecticut Democrat's effort -- which comes in response to urging from FDIC Chairman Sheila Bair, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner -- would give the FDIC access to more money to rebuild its fund that insures consumers' deposits, which have been hard hit by a string of bank failures.
"I'm the kind of person that likes to be prepared for all contingencies," - FDIC Chairman Sheila Bair