Elizabeth Warren elected, a crushing defeat for big banks?

[Jack21222]

I don't see it that way, but I'll rephrase nonetheless:

Regulation of a bank at some point could become indistinguishable in effect from nationalizing a bank.

But nobody's proposing anything remotely that far, particularly not Elizabeth Warren, so why are you bringing this up? Just trying to derail the thread in hopes of getting it closed or something?

 

[AlephZero]

Regulation of a bank at some point could become indistinguishable in effect from nationalizing a bank.

Maybe we are "divided by a common language" here, but in the UK "nationalizing" would mean all the assets and liabilities of the bank being taken into government ownership, as with Northern Rock in the UK in 2008. But that had nothing to do with regulation per se, and in fact Northern Rock has been sold back into the private banking sector (as part of the Virgin group). The primary objective was to protect retail customer confidence and stop a run on the bank, not "regulation".

 

[turbo]

One regulation that I would dearly love to see: Banks must maintain capital reserves in excess of their speculations. If their bets turn bad, it should not fall to the US taxpayers to bail them out (again!). The big banks are great at privatizing profits while socializing losses. I hope Warren and other members of the banking committee make this a top priority.

 

[lisab]

I don't see it that way, but I'll rephrase nonetheless:

Regulation of a bank at some point could become indistinguishable in effect from nationalizing a bank.

Which could be said about anything...it's the slippery slope argument, quite plainly. And it's no reason to not regulate banks, IMO.

 

[mheslep]

Maybe we are "divided by a common language" here, but in the UK "nationalizing" would mean all the assets and liabilities of the bank being taken into government ownership, as with Northern Rock in the UK in 2008...

[my bold]. Sure, I suppose that is the common understanding, and federal regulators regularly seize financial firms in the US in the traditional sense as you describe.

The definition of 'ownership' is the problem, at least in the banking business, before anyone admits to seizing anthing. My understanding of ownership entails the ability to control a thing and especially the ability to sell it. So then, if a third party, tentatively not the owner, can
i) remove a company's officers at will without criminal charges and forward new officers of its choosing,
ii) determine the pay of the officers,
iii) in a sale of the company, http://articles.sun-sentinel.com/2012-07-31/business/fl-bankatlantic-sale-approved-20120731_1_bankatlantic-bancorp-jarett-levan-alan-levan

going on and on in a like manner about the particulars of the company's methods of doing business. At the same we see the officers of such companies moving back and forth between seniors positions of the 'third party' and the company. In these conditions the ownership of the company is less than clear to me.

Perhaps something like the above measures are necessary to prevent abuses by bankers, at least while the government is responsible for backing money, but having said that does not change the blurring of ownership in my mind.

 

[Locrian]

One regulation that I would dearly love to see: Banks must maintain capital reserves in excess of their speculations.

Describe how current RBC rules fail to accomplish this at this time. Details, please.