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Thu Mar 22, 2012, 09:58 AM

The Dallas Fed Is Calling For The Immediate Breakup Of Large Banks

Source: The Business Insider

Richard FisherIt's hard not to think it's a big deal when a branch of the Federal Reserve system calls for the breakup of major American banks.

The bank has just released its annual report, and the title of the letter is: Choosing the Road to Prosperity Why We Must End Too Big to Fail—Now.

Here's the full letter from Dallas Fed President Richard Fisher, generally known as one of the most hawkish and conservative Fed Presidents.

Letter from the
President
If you are running one of the “too-big- to-fail” (TBTF) banks—alternatively known as “systemically important financial institutions,” or SIFIs—I doubt you are going to like what you read in this annual report essay written by Harvey Rosenblum, the head of the Dallas Fed’s Research Department, a highly regarded Federal Reserve veteran of 40 years and the former president of the National Association for Business Economics.


Read more: http://www.businessinsider.com/dallas-fed-calls-for-breakup-of-big-banks-2012-3#ixzz1plgWWQ7l



I am surprised that this is not bigger news.

44 replies, 6840 views

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Reply The Dallas Fed Is Calling For The Immediate Breakup Of Large Banks (Original post)
Julian Englis Mar 2012 OP
FarCenter Mar 2012 #1
Julian Englis Mar 2012 #3
jwirr Mar 2012 #8
FarCenter Mar 2012 #13
jwirr Mar 2012 #14
FarCenter Mar 2012 #18
jwirr Mar 2012 #24
freshwest Mar 2012 #42
jwirr Mar 2012 #44
FarCenter Mar 2012 #10
tclambert Mar 2012 #38
think Mar 2012 #2
AlbertCat Mar 2012 #25
think Mar 2012 #27
apnu Mar 2012 #4
dougolat Mar 2012 #37
One_Life_To_Give Mar 2012 #5
denverbill Mar 2012 #6
Leftist Agitator Mar 2012 #28
Auntie Bush Mar 2012 #34
jwirr Mar 2012 #7
Mopar151 Mar 2012 #9
freshwest Mar 2012 #12
Lucky Luciano Mar 2012 #32
jpak Mar 2012 #11
Fuddnik Mar 2012 #15
wordpix Mar 2012 #16
Fuddnik Mar 2012 #19
FarCenter Mar 2012 #20
Auntie Bush Mar 2012 #35
zipplewrath Mar 2012 #17
Trillo Mar 2012 #26
zipplewrath Mar 2012 #29
Trillo Mar 2012 #30
harun Mar 2012 #21
obxhead Mar 2012 #22
MindMover Mar 2012 #23
bvar22 Mar 2012 #31
webDude Mar 2012 #33
freshwest Mar 2012 #43
sarcasmo Mar 2012 #36
tclambert Mar 2012 #39
Bohunk68 Mar 2012 #40
sendero Mar 2012 #41

Response to Julian Englis (Original post)

Thu Mar 22, 2012, 10:02 AM

1. Texas sour grapes

All the large banks in Texas either went bust or were acquired as distressed properties during the savings and loan crisis.

Those bank headquarter towers in downtown Houston and Dallas now bear the names of banks headquartered in Charlotte, San Francisco or New York.

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Response to FarCenter (Reply #1)

Thu Mar 22, 2012, 10:09 AM

3. I think the largest independent bank in Texas may be Comerica--and it moved there from Michigan

I believe it moved headquarters from Detroit to Dallas in 2007 or so.

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Response to Julian Englis (Reply #3)

Thu Mar 22, 2012, 10:27 AM

8. And that is the bank that my GoDirect account is in which means that the Social Security Admin.

has its account there. Just saying to add info.

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Response to jwirr (Reply #8)

Thu Mar 22, 2012, 10:46 AM

13. The Social Security Admin's accounts are US Treasury accounts at the New York Federal Reserve Bank

The transfers to your account are by electronic messages through the payment clearing and settlement networks between the banks.

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Response to FarCenter (Reply #13)

Thu Mar 22, 2012, 10:52 AM

14. But it is not my account. I just access my monthly payments through that bank. So there is no

actual money in that bank? Then why didn't they use a bank in my state?

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Response to jwirr (Reply #14)

Thu Mar 22, 2012, 11:46 AM

18. You probably have a Comerica-issued The Direct Express® Debit MasterCard® ?

In which case Comerica has opened an account for the debit card that is essentially like a checking account without checks. Plus, the debit card may have restrictions on use and doesn't allow overdrafts, etc. that a normal checking account debit card might allow.

Monthly SSA provides an instruction to the US Treasury which sends it to the Fed of NY to transfer an amount of money equal to your benefits to your account at Comerica. As you use the debit card, the funds in the account are drawn down.

SSA contracts with Comerica to provide these "benefits pre-paid debit cards".

The other GoDirect possibility would be for SSA to have NY Fed send your benefit money to a checking or savings account that you opened at a bank or credit union, which could be a local one.

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Response to FarCenter (Reply #18)

Thu Mar 22, 2012, 12:10 PM

24. Thank you. Did not understand it.

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Response to jwirr (Reply #24)

Fri Mar 23, 2012, 09:58 AM

42. I'm glad you do. NOW I'm confused. LOL

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Response to freshwest (Reply #42)

Fri Mar 23, 2012, 12:46 PM

44. Confusion is the symbol of the times. Aren't we all suffering from that disease?

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Response to Julian Englis (Reply #3)

Thu Mar 22, 2012, 10:35 AM

10. It's headquarters building in Dallas tells the story

Originally known as Momentum Place, the tower was built as the new headquarters of MCorp Bank.


http://en.wikipedia.org/wiki/Comerica_Bank_Tower

MCorp Bank was acquired by Bank One of Columbus, which was acquired by JPMC of New York. The building is actually owned by a real estate company from California.

Comerica Park is where the Tigers play in Detroit.

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Response to Julian Englis (Reply #3)

Fri Mar 23, 2012, 06:37 AM

38. Yeah, and that bank still has its name on Not-Tiger Stadium

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 10:03 AM

2. Bout time someone said this but is anyone listening?



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Response to think (Reply #2)

Thu Mar 22, 2012, 12:53 PM

25. I hope this chart isn't too small (no pun intended) to read...

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Response to AlbertCat (Reply #25)

Thu Mar 22, 2012, 01:28 PM

27. I like your chart better! Little tough to read but illustrates the consolidation clearly /nt

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 10:14 AM

4. shhh! The Masters of the Universe don't want to talk about TBTF (nt)

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Response to apnu (Reply #4)

Fri Mar 23, 2012, 04:00 AM

37. That's because it works out as "Too Big To JAIL"

When they do get convicted in court, the penalty is usually a fine that merely equals a tax on ill-gotten-gains.
Just think if three-strikes-you're-out laws applied to big banks and corporations: their size and longevity would guarantee that sooner or later they couldn't afford another conviction, and thence well behaved!
It would make breaking up very attractive, or it would get three-strikes laws thrown out; either way, good.

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 10:15 AM

5. Now you've done it

Now you've done it

Our overlords are not going to be happy seeing the truth printed. Hope he has good life insurance.

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 10:19 AM

6. Commies. Thank God the Obama administration won't listen to these leftist agitators.

/sarcasm

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Response to denverbill (Reply #6)

Thu Mar 22, 2012, 01:31 PM

28. Did someone say Leftist Agitator?

 

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Response to Leftist Agitator (Reply #28)

Thu Mar 22, 2012, 09:09 PM

34. LOL! If he shoe fits....................

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 10:26 AM

7. Finally. This was needed from the beginning of this mess.

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 10:34 AM

9. When a regional Fed Chairman agrees with Matt Tabbi at the Rolling Stone

Either something's painfully obvious, or the first flight of pigs is on the taxiway.

http://www.rollingstone.com/politics/news/bank-of-america-too-crooked-to-fail-20120314

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Response to Mopar151 (Reply #9)

Thu Mar 22, 2012, 10:44 AM

12. Pink Floyd moment

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Response to Mopar151 (Reply #9)

Thu Mar 22, 2012, 03:01 PM

32. Fisher has always felt this way implicitly. nt

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 10:39 AM

11. CALL CONGRESS RIGHT FUCKING NOW - SERIES

no sarcasm intended - too big to fail is too big to exist...

yup

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 10:55 AM

15. Geithner's not going to like that.

The President told him to draw up plans to break up Citi right after he first took office, and Geithner ignored him.

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 10:56 AM

16. all the states should get this memo

I used a local bank in CT for 20 yrs., which was recently taken over by "Union Savings Bank." Found out this is a subsidiary of Bank of America and now they're charging fees for no activity if you don't write a check or whatever in a month.

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Response to wordpix (Reply #16)

Thu Mar 22, 2012, 11:50 AM

19. Standing between a bank and it's fees can be hazardous to your livelihood.

My stepson was the Head Teller at a local bank in Cleveland a couple of years ago, and within reach of a management position.

They instituted a new "inactivity" fee, and he noticed that a bunch of his elderly customers were about to get whacked with it. A fee, they really couldn't afford.

In his position, he had access to all of the accounts, and he transferred $0.05 from his account into each of their accounts, to avoid the fee.

They fired him faster than you can make change for a dollar. Now, he's a phone worker, elsewhere.

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Response to wordpix (Reply #16)

Thu Mar 22, 2012, 11:51 AM

20. Union Savings Bank of Danbury, CT appears to be independent

Check again. There are lots of "Union Savings" banks around the country, mostly unrelated to each other. It was a popular name at one time.

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Response to wordpix (Reply #16)

Thu Mar 22, 2012, 09:11 PM

35. Time to find another bank!

Good luck!

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 11:33 AM

17. OWS should be all over this

This is something OWS could latch onto with some sort of "break 'em up ourselves" movement. Encourage cities and individuals, as well as local businesses to "go local" with their banking to "break up the TBTF ourselves".

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Response to zipplewrath (Reply #17)

Thu Mar 22, 2012, 01:28 PM

26. Interesting idea.

In our area, there are no locally-own banks, but there are a handful of TBTF. There are no credit unions, unless one drives 13+ miles to the next bigger town.

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Response to Trillo (Reply #26)

Thu Mar 22, 2012, 01:43 PM

29. Okay

I drive 13 miles to work every day, but that's neither here nor there. If the credit union has "online banking" it can remove many of the reasons for ever going to the bank. I go once a month and I really don't "have" to do that, ATM's will handle 90% of it.

'Tis a sad statement though that the only institutions are TBTF. Strange economics.

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Response to zipplewrath (Reply #29)

Thu Mar 22, 2012, 02:31 PM

30. It is an unreasonable walking distance. Local = reasonable walking distance.

Poor people likely don't have cars, or if they do, cannot afford to drive them. Presuming a mile can be walked in about 20 minutes, that's 3 mph. 13/3 ≈ 4+ hours. Walking to and back from your bank should take 8-9 hours of ones day?

My definition of local is within walking distance.

We do drive 13 miles, 26 miles round trip, once per month. Hopefully, we can get everything we need on that schedule, with the exceptions of fresh fruits and vegetables. There really isn't money for a new car, proper repair of the old car (love to get it painted, but not necessary to its function), or even the cost of gasoline.

If one needs to have a bank, it should be within a reasonable walking distance. I'm guessing that's very roughly a 1 mile radius, consuming less than 1 hour roundtrip for foot transport.

It is doubtful that future generations, the mass of people, will have much other than their feet to transport them from place to place.

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 11:52 AM

21. I'm sure the regulators in the Obama administration (hired from big banks) will get right on that

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 11:57 AM

22. If I were in his shoes I would avoid small planes.

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 12:06 PM

23. It is not leading because it is not bleeding red......

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 02:35 PM

31. Why stop at The Banks?

We desperately need another Teddy Roosevelt ("The Trust Buster") to break up ALL the Too BIG Corporate entities,
and return to a system where Mom & Pop (Locally owned businesses) could compete with the Big Boxes on a level playing field.

When I was young (50s & 60s), an out-of-state corporation could NOT come into an area and undercut the local businesses.
At that time, small, locally owned businesses thrived in Small Town America,
and a dollar spent at those businesses circulated in the local economy.

Now, the only locally owned businesses surviving in small towns are Antique Dealers (Junk Stores), Beauty Parlors, and Funeral Homes.



You will know them by their WORKS,
not by their excuses.
Solidarity99!
--------------------------------------------------------------------------------------------------------------------------------

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 08:33 PM

33. They are playing "good cop, bad cop", I tend to not believe the FRB.

 

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Response to webDude (Reply #33)

Fri Mar 23, 2012, 10:04 AM

43. +1

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Response to Julian Englis (Original post)

Thu Mar 22, 2012, 11:51 PM

36. Good for Dallas, this has been needed for some time now.

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Response to Julian Englis (Original post)

Fri Mar 23, 2012, 06:41 AM

39. Bust 'em, bash 'em, break 'em, smash 'em.

Too Big To Fail is anti-competitive. Our system only works well if we have real competition in the business sector.

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Response to Julian Englis (Original post)

Fri Mar 23, 2012, 07:14 AM

40. I Bank at a local

bank, the Bank of Richmondville. It has three branches and only here in Schoharie county. (Upstate NY). It is totally locally owned and does not farm out its mortgages. I have had an account for over 30 years and now that I'm retired my SSA is automatically deposited with them and since I'm over 60, I get free checking. I do a lot of my credit account payments by phone for free. The President of the Bank sits in front of me at church and the VP (retired, a woman) sits two pews in front of me. The current VP is another woman. A Progressive bank with roots in the local community. The second owner is in Ripley's as being the longest serving President of a bank (75 years) and he paid off all of our village's debts about 30 years ago. Donated a fire truck to the VFD and a swimming pool for the kids. That's because of purchasing IBM stock many years ago when it was only 25 cents a share.

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Response to Julian Englis (Original post)

Fri Mar 23, 2012, 08:20 AM

41. Paging Captain Obvious..

... I agree with every sentiment expressed in this article re TBTF and I did years ago as did every other serious person on the planet.

I guess better late than never, not that any of this is going to happen.

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