As it currently stands, most bank holding companies already follow major regulations stipulated under the Basel II, some at their own peril. For example, capital adequacy, as measured by Tier 1 and Tier 2 risk weighted assets, should be at 8%, leaving banks with excessive leverage and in turn financial risk. Add off balance sheet activities such as derivatives into the mix (that they do not count as risk weighted in their formulation), and you have considerable weigh on the small equity required by banks. Granted, in times of good economic conditions, banks can maximize their return with the capital regulations allowed by Basel II, but it leaves them vulnerable in downturns when managers and traders do not insulate the bank against adverse interest rate movements or credit deterioration of loan portfolios.

I agree, the pressures of globalization and merger mania has left banks to get larger to maximize profit through economies of scope and scale. This business model of financial supermarkets like Citi or Bank of America is largely due to heightened competition from outside and inside entities all competing in an increasingly synergized world. It will be near impossible for organizations to compete in the global world and remain competitive without having the need to acquire or get larger; so in this regard it will be impossible for these banks to get smaller.

I'm also weary of the current administration and their woeful policies thus far. The recent FDIC 250,000 insurance against individual deposits is another "well intentioned" mistake that will just put less pressure on bank's liquidity management, tempting them to play around with their equity even more. So instead of protecting depositors against moral hazard, they are giving an implicit green light to banks to get larger when liquidity isn't as constrained as it is right now.

LORI:

Taxing companies that ship jobs overseas is the exact simplistic, populist policy prescriptions from the left that no matter how "well intentioned", are woefully shortsighted and frankly elementary. Rather than arrest the problem at the core, which is certain excessive socialist spending that puts upward pressure on labor prices, they seem content to scrutinize an incidental consequence to the very policies they indoctrinated so vociferously in the past (that is jobs lost to cheap labor).

That isn't to say the right have the answers (though they make more sense most of the time), but I hate the fact that the country is fractured and compartmentalized into two opposing ideologies, and people seem to rationalize and coalesce onto one side or the other. Whatever happened to independent thought?

I would seriously question whatever comes out of the mouth of any political figure, because the very structure of our institutional frameworks is predicated on the two party system. Until we reform how we think and in turn our representatives in the legislature, then we will be always tempted to choose sides in two failed parties.

Its iori by the way lol. I is not a uppercase L.


But very well said....

Its iori by the way lol. I is not a uppercase L.


But very well said....

Did i say that? No, no i did not. Stop putting words in my mouth. Gallup list their numbers and statistics in plain view.

I didn't read this thread, but it dosen't matter much. The GOP is not winning 10 seats. Worst case scenario, Obama's blue dog problem becomes more significant.

My biggest problem with bailing out banks and companies with tax dollars, is they will then use it as a reason to either drop other funding or raise taxes.

Add on to that, that the banks and companies they are bailing out are selling products to the very people who are bailiing them out with no real benefit other than "jobs" and "governement taxes".  There are PLENTY of other things to do with my money than give it to some bank who spends 400,000 dollars a year on a company retreat.  There are PLENTY of other things to do with my money than to give some company who pays union members 25-50 dollars an hour for something people in other countries would do for 5-10 dollars an hour.

Not only that, but its a double ass ****. Your taxing me, to save some companies that dont really have much benefit to me personally, and then if i do want to use those companies services (home loans/buycars) i have to pay full price after already forking over part of my paycheck.

Its like the entire country is on welfare, and it dont matter how much you make or how hard you work, everyone wants equal share.  **** is ******* retarded, and honestly, im glad obama is ******* up the country, i hope he blows us back into the 20's. So we can come back and make some real progress instead of this fist **** **** thats going on now.

"I don't trust any polls that do not have any stats other than %. How many were polled? from where? ect ect."

I just took a quick glance at gallup, which is why I brought it up.  I don't see anywhere where it lists anything about question's asked, how many people, from what regions, nor what type of selection process was used, etc. 

I don't see it "listed in plain view" anywhere but maybe I'm just missing it. 

Can you point out where they answer these questions at?

The fun part is, our politicians blame banks to not give out loans to companies dependent on credit financing (German businesses traditionally have a pretty bad equity base, 18% on average), while Basel II is still active. Now they're discussing to pause it for a while.

Just a thought, maybe an earlier implementation of Basel II in USA would've eased the current crisis? I mean, Spanish banks were heavily regulated even before the crisis (cash reserves) and they've done quite well until now, if I'm not mistaken.

So, implementing it now might be a bad idea, but regulating banks around the world seems to be inevitable in the future. I'm against splitting up businesses, it always smells like socialism.

Taxing companies that ship jobs overseas is the exact simplistic,
populist policy prescriptions from the left that no matter how "well
intentioned",

I'm from the right (or at least that is what people claim) and I think some measures to protect American jobs are in order.  American workers can not compete (nor should they) in a globalized economy with third world countries that can pay workers less than a dollar a day.

are woefully shortsighted and frankly elementary.

The "Longsightness" of globalism has left us with a FIRE (Financial Investments/Real Estate) based economy which is in the process of collapsing.

 If this is what the intellectual economists offer us, give me the elementary thinkers, please.

Rather
than arrest the problem at the core, which is certain excessive
socialist spending that puts upward pressure on labor prices.

Socialist spending (and policy) may put upward pressure on labor prices, but even if we rid ourselves of such policies, I don't see how Americans could compete with the third world without a significant drop off in standard of living.


Whatever happened to independent thought?

What am I, chopped liver?   I certainly don't agree with either the Republicans or the Demcorats every time.  I agree with what you said though.  Too many people treat politics as a spectator sport, and parrot what they hear other people say rather than thinking things through for themselves.

I would seriously question whatever comes out of the mouth of any political
figure,

You'd better be careful, Iori finds anyone who questions government "Alarming".