Jaws, the Bank Version
Too-big-to-fail is morphing into bigger-than-ever swallowing up failing-faster-than-ever.
The nation’s largest banks, infused with taxpayer billions, are feasting on the weak as the Washington Post reports that “no consequence of the crisis alarms top regulators more than having banks that were already too big to fail grow even larger and more interconnected.”
FDIC chair Sheila Bair sums it up succinctly: “It is at the top of the list of things that need to be fixed. It fed the crisis, and it has gotten worse because of the crisis.”
This alarm follows news that her agency’s insurance fund, which guarantees deposits, shrank another 20 percent in the second quarter, down to $10.4 billion, the lowest level since the savings and loan crisis in the early 1990s.
So far this year 81 banks have failed with another 416 on the FDIC’S “problem list.”
Meanwhile, the bailout-bloated sharks are flourishing. J.P. Morgan Chase, Bank of America and Wells Fargo each now holds more than $1 of every $10 on deposit in the country.
4 Responses to “Jaws, the Bank Version”
Not merely that, Robert, but also this is being done with the knowledge, approval, and almost certainly active management as well by the Obama administration.
So far we haven't seen the banks acquire real estate interests (even home builders or home contract work firms, say) along with failing investment banks, too, but…
is this not the logical conclusion of the reagan revolution? we wanted smaller gov't … fewer regulations. well, now we have it. repealing glass-steagle [sp?], courtesy of gramm-leach-bliley [sp?] merely improved the situation in the favor of those least likely to regulate themselves and who had the most potential to do the most damage to the most people only to serve their own interests. just a little more gasoline was needed for the fire … and it was copiously supplied by chris cox at the SEC when he opened the floodgates in the form of 40:1 leverage.
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