Can two senators end ‘too big to fail’?

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Brown and Vitter may have created a blueprint for moving policy forward in a divided Congress.

Greg Russak‘s insight:

“The idea that two senators from opposite sides of the ideological spectrum can find common ground to attack a problem with a simple solution is novel in the Senate these days. If Brown and Vitter manage to end the subsidies to banks deemed “too big to fail,” they will have accomplished more than “merely” preventing the next financial crisis. They will have helped to create a blueprint for how to get things done in an era of partisan strife.That is a worthy goal all Americans should be grateful for.” – Barry Ritholtz, Washington Post

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Brown-Vitter Recasts Financial-Reform Battlefield

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April 29 (Bloomberg) — A year ago, the big U.S. banks were focused on repealing, or at least eliminating large parts of, the Dodd-Frank financial-reform law.

Greg Russak‘s insight:

“Bair, Fisher, Hoenig, Rosenblum and the people who work with them aren’t populists. They are thoughtful and experienced technocrats who have worked long and hard in the sphere of practical policy.

Intellectually, the tide has turned. The dangers of reckless behavior by global megabanks are now understood much more broadly. And Brown-Vitter provides an appropriate roadmap for addressing some of the core problems and making the financial system significantly safer.” – Simon Johnson, a professor at the MIT Sloan School of Management, a senior fellow at the Peterson Institute for International Economics, and co-author of White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You.

See on www.nationalmemo.com

The Biggest Price-Fixing Scandal Ever | Politics News | Rolling Stone

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The Illuminati were amateurs. The second huge financial scandal of the year reveals the real international conspiracy: There’s no price the big banks can’t fix

Greg Russak‘s insight:

And the hits just keep on coming. How many more scandals and how much more proof will we need before we realize that unregulated bankers pose the greatest threat to our society? Did we learn nothing from the original Gilded Age? And bad news for all the “small government” lovers. The big bad government is NOT who is rigging the system and reaping all the benefits from the destruction of entire economies. They’re mostly pawns, biding their time in the minor leagues while waiting for the revolving door to move them into pay days in the private sector. We need Citizens United to be overturned, public financing of elections, term limits, restraint on all securities trading by elected officials while in office and for something like 5 years after they leave, and more people like Elizabeth Warren who are asking regulators and bankers all the right – and tough – questions.

See on www.rollingstone.com

Two Senators Try to Slam the Door on Bank Bailouts

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Two senators know they’ll have to fight big banks to achieve passage of a bill to protect taxpayers from future bailouts.

Greg Russak‘s insight:

“A little over a month ago, the Senate held a nonbinding vote on the problems posed by megabanks. Its members voted 99 to 0 to “to end ‘too big to fail’ subsidies or funding advantage for Wall Street megabanks.”

Brown-Vitter would achieve those goals while also protecting taxpayers. As such, it will be interesting to see which senators retreat from their earlier positions by refusing to support the bill. Constituents on the alert for hypocrisy, take note.” – Gretchen Morgenson, NY Times

For a different take on Brown-Vitter there’s this:

“Even so, the bill will of course face enormous resistance, and not just from the bank lobbyists who seem reflexively to oppose any measure to overhaul their industry. There are analysts who want to do more to rein in the banks, but who think the senators are naïve, or intellectually lacking, to think that today’s complex financial system can be made safer with their seemingly simple fixes. They have a point.” – Peter Eavis, NY Times DealBook

See: http://dealbook.nytimes.com/2013/04/26/the-seductive-simplicity-of-a-new-banking-bill/

I tend to think it’s time to give the “naive” approach a try. The banking industry has proven that they cannot self-regulate and they cannot be trusted. Ratings agencies may as well be on banking payrolls. The status quo is what got us into the mess, and from what I’ve read about Basel III and even Dodd-Frank, they still feel a little too much like having the foxes guarding us ordinary citizens trapped in our financial henhouses.

See on www.nytimes.com