Banking Institutions | Sense on Cents

Archive for the ‘Banking Institutions’ Category

“Banks Do Not Commit Misconduct, Bankers Do”

Posted by Larry Doyle on August 21st, 2014 8:56 AM |

The Department of Justice is soon expected to announce a $17 billion settlement with Bank of America. Is this justice?

I will defer in writing my own commentary this morning because the words and details on this topic provided by Dean Starkman qualify as a Sense on Cents Instant Classic:

There’s a much deeper problem here, however, and one that has received far less attention: Not only has the Department of Justice (DOJ) failed to build any criminal cases for financial-crisis misdeeds, but it’s also now settling with these banks without even filing civil complaints.

A complaint is the cornerstone of civil litigation, the foundation for even routine lawsuits. One of its primary benefits—and of adversarial legal proceedings generally—is that a complaint can bring huge amounts of previously undisclosed information into the public record. In these mortgage securities cases, the Justice Department had not only an obligation but an opportunity: to show the country what it found, to deter future misconduct, to complete the story of the financial crisis in humanizing, clarifying, searing detail. (more…)

Tags: Bank America Countrywide, Bank America settlement, Benjamin Lawsky, BOA settlement, Dean Starkman, Department of Justice settlement, DOJ settlement with BOA
Posted in Bank of America, Banking Institutions, General | 1 Comment »

Wikileaks: How Banks Will Continue to Rule the World

Posted by Larry Doyle on June 20th, 2014 10:57 AM |

I had a little wind in my sails this morning when I saw a lead article in today’s Wall Street Journal regarding the pathetic investor protection provided by the meter maids at FINRA. While adding a little spice to the mix by commenting on that article, I got blown away by a tsunami coming from another direction.

Let’s navigate.

Not that there was ever any doubt that the major global banks rule the world (and will likely continue to do so), a riveting press release put out just yesterday by Wikileaks confirms this reality. Major props to Yves Smith at Naked Capitalism for bringing attention to the Wikileak press release, Secret Trade in Services Agreement (TISA). The serious students in the crowd will have plenty to chew on and digest in the Agreement.

For those more inclined to study from the Cliff Notes, let’s give thanks to Professor Jane Kelsey of the University of Auckland, New Zealand who brings real transparency to the proposed Agreement in her Analysis Article also released by Wikileaks: (more…)

Tags: financial regulation, free trade agreements, how will banks continue to rule the world, IMF papers, in bed with Wall Street, Jane Kelsey, Jane Kelsey University of Auckland, secrecy of TISA, self-regulation, TISA, Trade Services Agreement, Wall Street banks will rule the world, Wikileaks, World Trade Organization, WTO
Posted in Banking Institutions, General | 4 Comments »

Will ‘Too Big to Fail’ Banks Charge for Deposits?

Posted by Larry Doyle on November 25th, 2013 9:38 AM |

$82 billion.

What does that figure represent? The subsidy (aka competitive advantage) that accrues to our major banking institutions from favorable borrowing rates given their status as ‘too big to fail.’

Those tens of billions of dollars truly represent a nice, big head start for a handful of banks, and a withering assault on the precepts of free market capitalism for the rest of us.

As if $82 billion were not enough of a subsidy, let’s not forget that these banks pay you, as a depositor, virtually zero interest for the ‘privilege’ of holding your money there. Well, that may be changing. How so? How would you like to actually pay interest to the banks in order to keep your money in their institutions? Really? No way?

Yes way. (more…)

Tags: banking oligopoly, banks, charging people to hold money on deposit, Federal Reserve tapering, might banks charge depositors, negative interest rates on deposits, quantitative easing tapering, similarities between the Mafia and Wall Street, subsidy of too big to fail, tapering of QE, too big to fail banks, too big to fail subsidy, Wall Street and The Godfather similarities, Wall Street oligopoly, what is an oligopoly, will banks charge depositors, will it cost depositors to hold money at banks
Posted in bank earnings, Bank Failure, Bank of America, Bank Stress Test, Banking Committee Meeting, Banking Institutions, General, Wall Street, Wall Street Washington Incest | 4 Comments »

5 Years Later: Banks Still Too Leveraged

Posted by Larry Doyle on September 12th, 2013 9:09 AM |

Do you think there is a reason why bank balance sheets are so convoluted and opaque? Of course there is.

The lack of meaningful transparency allows the banks to continue to employ excessive degrees of leverage across a widely disparate array of businesses and with a paucity of competition all in the hope of generating outsized returns. But who do you think bears the ultimate risk?

They pursue these paths with the support of the Federal Reserve’s zero interest rate policy and a regulatory system that belies meaningful oversight despite those who might want us to believe that Dodd-Frank brought reform to the system.

Former FDIC chair Sheila Bair does not leave much to interpretation on these topics. (more…)

Tags: bank leverage, banks are still too leveraged, Federal Reserve, leverage on Wall Street, regulation on Wall Street, Sheila Bair Bloomberg interview, Sheila Bair interview on Bloomberg, Wall Street, Wall Street 5 years later, Wall Street regulation, Wall Street what has changed
Posted in bank earnings, Bank Failure, Bank Stress Test, Banking Institutions, General, regulation, regulatory capture | 3 Comments »

Stories Deserving More Attention: Did You See This?

Posted by Larry Doyle on April 8th, 2013 8:21 AM |

While taking a brief respite from writing last week, I was struck by a number of stories worthy of real attention. Some of these items have received a fair bit of focus, while others may have passed largely unnoticed.

I will reference these stories now and will certainly come back to many, if not all, of them in the near future. The items include:

1. In what might only be compared to trying to turn around the Titanic on one of your local streets, the Bank of Japan is launching a “quantitative easing on steroids” program. The goal of “all this juice” is to generate a 2% rate of inflation in the next two years from what has been a two-decade deflationary cycle. (more…)

Tags: bank of Japan program to promote inflation, Bank of Japan quantitative easing, Bill Cohan commentary on bank regulators, black swan, decline in the labor participation rate, deflation in Japan, disability claims, Japanese economy in deflation, Japanese equity markets, Joe Sciddurlo FINRA whistleblower, Joe Sciddurlo lawsuit against FINRA, Joe Sciddurlo questions authority at FINRA, lawsuit against FINRA, Nassim Taleb comment on Mary Schapiro, permanent underclass in America, quantitative easing on steroids, rural poverty, support for asset markets, urban graduation, yen carry trade
Posted in Banking Institutions, Economy, Education, Employment, FINRA, General, Mary Schapiro | 6 Comments »

Holder Refutes Obama with “Indictment” of TBTF

Posted by Larry Doyle on March 12th, 2013 8:25 AM |

In December 2011, President Obama was interviewed on 60 Minutes and had the following exchange with CBS’ Steve Kroft in regard to behaviors on Wall Street:

KROFT: One of the things that surprised me the most about this poll is that 42%, when asked who your policies favor the most, 42% said Wall Street. Only 35% said average Americans.

My suspicion is some of that may have to do with the fact that there’s not been any prosecutions, criminal prosecutions, of people on Wall Street.

And that the civil charges that have been brought have often resulted in what many people think have been slap on the wrists, fines. “Cost of doing business,” I think you called it in the Kansas speech. Are you disappointed by that? (more…)

Tags: Department of Justice, Eric Holder comment on banks, Eric Holder indicts too big to fail, holder on too big to fail, Holder on too big to prosecute, Obama on too big to fail, too big to fail, too big to jail, too big to prosecute, too big to regulate, Wall Street regulation
Posted in Bailout, Bank Failure, Banking Institutions, General, Obama Administration, too big to fail, Wall Street, Wall Street Washington Incest | 6 Comments »

Will Uncle Sam Expand “Too Big to Fail?”

Posted by Larry Doyle on February 20th, 2013 9:45 AM |

There is not even one credible individual in the world today who would believe that we do not still operate under a “too big to fail” model for our banking industry.

We now know that “too big to fail”also means “too big to regulate” and “too big to prosecute.” Free market capitalism is dying a slow and steady death in the process.

Might we ever get out from under the heavy burden of this model? We can only hope. Yet I awaken this morning and vomited my coffee as I read in the WSJ,

Should the government backstop even more of the financial system than it already does?

Sure, if you love a mix of crony capitalism and socialism, wave it in, right? (more…)

Tags: capitalism did not fail, crony capitalism, cronyism, Federal Reserve, free market capitalism, how did capitalism fail, nonbank financing activity, shadow banking, too big to fail, too big to prosecute, too big to regulate, william dudley
Posted in Banking Institutions, Federal Reserve, General, Wall Street | 13 Comments »

David vs Goliath: The Case for Community Banks

Posted by Larry Doyle on January 29th, 2013 9:19 AM |

While the mega-banks on Wall Street flex their oligopolistic muscles (price controls, imperfect information, not sharing data), I want to take this opportunity to throw some support to the Davids of the banking world.

Who are these Davids? The community banks. Do you feel like you get a lot of personal touch and proper attention from Goliath? Really? How about from David?

Let’s navigate and review a compellingly detailed analysis recently released by the Dallas Fed. (more…)

Tags: A Lender for Tough Times, benefits of community banking, benefits of community banks, business loan volume, credit provided by community bans vs mega banks, David vs Goliath, defending small banks, focus in large banks, focus on capital markets, large banks vs small banks, oligopolistic muscles, Robert Wilmers, small banks vs large banks, small business lending, small business loan volume, small business loans, the case for community banks, Wall Street oligopoly, Wall Street vs Main Street, Wilmers M&T Bank
Posted in Banking Institutions, General | 2 Comments »

1 in 5 Trust Our Banks

Posted by Larry Doyle on January 28th, 2013 8:56 AM |

What is the basis of any relationship?

Trust.

How much do you want to engage somebody if you have little to no trust in that individual or institution? Obviously not much. A healthy society is one in which trust is pervasive. The premise and foundation of trust within our relationships allows for the free flow of information, capital, and goods. Everybody benefits.

Regrettably, our nation has an enormous trust deficit currently. Why so? Once violated, trust does not easily or quickly return or regenerate. Although many within positions of leadership in our nation would like to present the rebound in our markets and supposedly within our economy as indicative of a return to a healthy nation, they are FOOLS if they truly believe that. Why so? (more…)

Tags: can I trust banks, can I trust the media, economic impact of lack of trust, economy suffers from lack of trust, How a Trust Deficit is Hurting Our Economy, how many trust our banks, impact of trust deficit, impact on our economy from lack of trust, trust Congress, trust deficit, trust deficit in America, trust in the media, trust in Wall Street banks, Wall Street-Washington incest
Posted in Banking Institutions, General, Trust, Wall Street Washington Incest | 2 Comments »

Fed Governor Fisher: “Break Up TBTF Banks”

Posted by Larry Doyle on January 17th, 2013 11:54 AM |

Three days ago I wrote how strongly I believe that the Wall Street landscape needs to be restructured. How so? I made my case in defining Wall Street as an oligopoly and Why Should the Banks Be Broken Up?

I concluded my commentary by highlighting that Dallas Federal Reserve governor Richard Fisher would be addressing this same topic on Wednesday evening. What did the good governor have to say? (more…)

Tags: break up the banks, Dallas Federal Reserve governor Richard Fisher, Fisher break up banks, how does an oligopoly work, Richard Fisher break up TBTF banks, should the banks be broken up, Wall Street is not free market capitalism, Wall Street lobby, Wall Street oligopoly, why banks should be broken up, Why Should the Banks Be Broken Up?
Posted in Banking Institutions, General | 11 Comments »