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why haven't we broken up the investment banks?
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Date: January 25th, 2022 5:01 PM Author: Big Pink Heaven the 2008 financial crisis was caused by banks having too much power, and the fear that they were so interconnected that if one of them failed it could take down the global economy. because of the crisis there was a mass consolidation of investment banks, so now there are fewer "too big to fail" banks, concentrating the risk and power even more.
after the dust settled from 2008 why were there no calls to break up these banks to distribute the risk and mitigate the damage that would be caused if any one failed? |
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Date: January 25th, 2022 5:07 PM Author: Chest-beating Stirring Wrinkle Stead You seem dumb and uninformed.
Are you familiar with Dodd Frank? Stress testing? Comprehensive capital analysis and review? The Volcker Rule?
There is zero risk of a U.S. bank collapse like we saw in 2008. ZERO. Banks are so fucking over-regulated in the U.S.
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Date: January 25th, 2022 5:09 PM Author: Big Pink Heaven calm down faggot, i do these things professionally and also agree that the banks are overregulated.
still, instead of regulating them to make sure they don't fail (many would have said they were overregulated pre-2008 or question the effectiveness of current regulations), why not break them up so that the risk is more distributed? |
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Date: January 25th, 2022 5:15 PM Author: salmon provocative rehab laser beams just think about them synergies nigga (http://www.autoadmit.com/thread.php?thread_id=5016646&forum_id=2#43846174) |
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Date: January 25th, 2022 8:48 PM Author: Chest-beating Stirring Wrinkle Stead That’s real retarded sir.
So make them spend more on transaction costs? Why?
One of the trade offs of a permanently low interest rate, high-regulation economy is banks will need to be consolidated to make economic sense. Boo hoo, we don’t have S&L’s on every corner like the 1970’s! A lot of good that did… |
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Date: January 25th, 2022 8:58 PM Author: Big Pink Heaven call me crazy, but i'd rather have a bunch of S&Ls on every corner than a handful of greedy kikes with enough power to torpedo the worldwide economy. and i don't trust regulations and the revolving door of regulators and banks to prevent it.
i think having a bunch of smaller firms would probably decrease transaction costs through competition. and to the extent it doesn't: i don't care. they have too much power over the global economy. whatever the cost is to breaking up the big banks i am willing to pay.
lastly, your primary concern seems to be overregulation. the banks wouldn't need to be so tightly regulated if they weren't so powerful. i'd rather distribute the risk by limiting how powerful one entity can become than trust the us government to effectively regulate and prevent another catastrophe. they've proven to be wildly ineffective with that, with the last meltdown being partially related to government incentivizing giving mortgages to anyone that can breathe. the banks were heavily regulated in 2008 and that didn't stop anything. |
Date: January 25th, 2022 5:01 PM Author: salmon provocative rehab laser beams republicans (http://www.autoadmit.com/thread.php?thread_id=5016646&forum_id=2#43846095) |
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Date: January 25th, 2022 5:03 PM Author: overrated odious stag film ✡ (http://www.autoadmit.com/thread.php?thread_id=5016646&forum_id=2#43846104) |
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Date: January 25th, 2022 5:05 PM Author: Flatulent Lascivious Shitlib Everyone wins when banks get broken down from a handful of mega banks into a few dozen medium sized but more specialized ones - EXCEPT for the management of the biggest banks. Shareholders win, society wins, borrowers and lenders win and the broader economy is more resilient. The only losers are the people getting the biggest paychecks at the top and profiting the most/hiring the lobbyists. (http://www.autoadmit.com/thread.php?thread_id=5016646&forum_id=2#43846117) |
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Date: January 25th, 2022 5:09 PM Author: Big Pink Heaven (http://www.autoadmit.com/thread.php?thread_id=5016646&forum_id=2#43846147) |
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Date: January 25th, 2022 5:06 PM Author: scarlet charismatic twinkling uncleanness explain the damage if one of them fails lol (http://www.autoadmit.com/thread.php?thread_id=5016646&forum_id=2#43846121) |
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Date: January 25th, 2022 5:06 PM Author: misanthropic boistinker This question is VERY antisemitic (http://www.autoadmit.com/thread.php?thread_id=5016646&forum_id=2#43846124) |
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Date: January 25th, 2022 5:08 PM Author: Spruce Violent Degenerate (http://www.autoadmit.com/thread.php?thread_id=5016646&forum_id=2#43846134) |
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Date: January 25th, 2022 5:09 PM Author: Big Pink Heaven (http://www.autoadmit.com/thread.php?thread_id=5016646&forum_id=2#43846148) |
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Date: January 25th, 2022 5:08 PM Author: Spruce Violent Degenerate The reason is that the big banks control the country (the Rothschild owned central bank controls the big banks) and we don’t even have a semblance of “real capitalism” here. (http://www.autoadmit.com/thread.php?thread_id=5016646&forum_id=2#43846142) |
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Date: January 25th, 2022 6:38 PM Author: Big Pink Heaven (http://www.autoadmit.com/thread.php?thread_id=5016646&forum_id=2#43846521) |
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Date: January 25th, 2022 5:09 PM Author: green irate locus Because (right or wrong) we decided that the answer to the mortgage crisis was MORE regulation.
Regs under Dodd Frank caused a lot of my smaller clients to fold when I was working in the space. The larger players just didn't want to take on the risk of doing business with the smaller shops. |
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Date: January 25th, 2022 5:13 PM Author: Big Pink Heaven yeah. i work in this space, and this is constantly what i try to convince libs of when they talk about "more regulations".
you can see it happening in real time. no new banks are coming, but small and local ones are constantly being acquired. a big reason for that is because compliance costs are not considered with regulations, and the small banks cannot afford them like the big ones can.
this happens in all sorts of industries. just look at some of most treasured restaurants in cities. they're often hundreds of years old and started by some immigrant serving food from his kitchen. that's impossible today, too much bullshit required to start a restaurant in most cities for someone to be able to do it with no money. |
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Date: January 25th, 2022 8:51 PM Author: Chest-beating Stirring Wrinkle Stead In a way (substituting regulatory costs with transaction costs), this reminds me of the passage from Bonfire of the Vanities:
Just imagine that a bond is a slice of cake, and you didn’t bake the cake, but every time you had somebody a slice of the cake a tiny little bit comes off, like a little crumb, and you can keep that. […] If you pass around enough slices of cake, then pretty soon you have enough crumbs to make a gigantic cake. |
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Date: January 25th, 2022 9:20 PM Author: Bronze Hateful Lay Right now there are a bunch of "fintech companies" that are basically illegally operating as banks. The ecosystem sprang up on easy fraudmoney and in the shadow of all the inefficiencies of trad banking. Soon, we'll have a collapse and safety and soundness / market regulators and crusading "public interest" legislators will crack down hard on these upstarts and impose a bunch of new requirements that only behemoth incumbents can comply with.
Everybody wins! |
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Date: January 25th, 2022 9:24 PM Author: motley mexican volcanic crater that sounds like the problem is more that regulators sat on their ass and allowed a massive concentration of risk in a product/space/sector of the financial system that they didn't understand and didn't pay enough attention to
financial institutions are just sorta fragile unless you want to go the "equity banking" route that some free market types have advocated for |
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Date: January 25th, 2022 9:29 PM Author: Big Pink Heaven it's kind of insane how the securities and exchange act was done to ensure greater transparency and reduce fraud and manipulation.
the biggest investment of the past decade has been crypto, which is completely unregulated. i'm not advocating that it should be, but ljl. oh just do make every company file 10-ks that no retail investor reads but allow people to sink their life savings willy-nilly into shitcoins that turn out to be scams on exchanges that are not insured and also often turn out to be scams. |
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Date: January 25th, 2022 9:45 PM Author: Bronze Hateful Lay It's going to be soooo cr being a complex litfag when the music stops. (http://www.autoadmit.com/thread.php?thread_id=5016646&forum_id=2#43847731) |
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Date: January 25th, 2022 5:10 PM Author: Dun Flirting Locale Fanboi Investment banks don’t really do anything except reduce transaction friction for a (big) cut of the pie. They could go away and it wouldn’t be a big deal. (http://www.autoadmit.com/thread.php?thread_id=5016646&forum_id=2#43846156) |
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Date: January 25th, 2022 8:52 PM Author: Chest-beating Stirring Wrinkle Stead See above:
Just imagine that a [an IPO/Merger] is a slice of cake, and you didn’t bake the cake, but every time you had somebody a slice of the cake a tiny little bit comes off, like a little crumb, and you can keep that. […] If you pass around enough slices of cake, then pretty soon you have enough crumbs to make a gigantic cake. |
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Date: January 25th, 2022 9:07 PM Author: motley mexican volcanic crater Do you mean split investment banks from commercial banks or make the combination investment/commercial banks smaller or what?
The banking system today is significantly safer than it was in 2007. The problem in 2007 that sparked everything was that we had $500bn+ asset banks that were leveraged 20x, 25x, 30x+ and regulated like Jefferies or whatever today. The Bank Holding Company banks being able to swoop in and swallow exploding pure independent investment banks likely made things less severe than they otherwise would have been
American banks are in a good spot right now. It's European banks that have been a perpetual shitshow for the past decade |
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Date: January 25th, 2022 10:35 PM Author: startled chad trailer park insane thread (http://www.autoadmit.com/thread.php?thread_id=5016646&forum_id=2#43848013) |