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Bank Crackdown Draws Criticism (Frank criticizes regulators)

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Frank Booth Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-05-09 02:21 PM
Original message
Bank Crackdown Draws Criticism (Frank criticizes regulators)
Source: Wall Street Journal

Politicians are putting pressure on regulators to ease up on small community banks across the U.S., a move some say could increase the cost of cleaning up the financial crisis.

Last week, House Financial Services Committee Chairman Barney Frank (D., Mass.) sent a letter to the country's top bank regulators, including Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair, urging them to "show some temperance in their regulation of traditional banks." One common complaint from lawmakers is that regulators' tough examinations are making banks reluctant to lend.

"A self-fulfilling prophecy of community bank failures, shrinking credit availability and a slower economic recovery can all result from a regulatory overreaction to the current crisis," said the letter, which also was signed by Rep. Walt Minnick (D., Idaho).

Federal bank regulators have hit hundreds of banks with formal and informal sanctions this year, ordering them to boost capital requirements -- reserves set aside to cover possible losses -- and sometimes to shake up management. Regulators have closed 115 banks since January, and bankers across the country are complaining examiners are criticizing the health of even the strongest banks.

Mr. Frank said in an interview he was trying to address an important public-policy issue in the letter and not exert pressure on regulators. He said he wasn't second-guessing how regulators should address specific banks or specific loans.

Read more: http://finance.yahoo.com/banking-budgeting/article/1080...
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virgogal Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-05-09 02:28 PM
Response to Original message
1. You're damned if you regulate and you're damned if you don't.
Thats kind of what I got from this article but I'm no financial genius.
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pattmarty Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-05-09 06:16 PM
Response to Reply #1
4. Well, that in my opinion is a fucking no brainer. Put me on the side....
......of damned if you don't (regulate).
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pscot Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-05-09 03:15 PM
Response to Original message
2. t's the big banks that caused all the trouble
Getting tough with the little guys is kind of like kicking your dog because you're pissed at your boss.
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high density Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-05-09 03:21 PM
Response to Reply #2
3. Get tough on everybody. Expect prudent lending from all.
We don't need another S&L-type crisis.
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naaman fletcher Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-06-09 02:13 PM
Response to Original message
5. Frank is wrong..
Yes, the big banks caused the sub-prime mess, but it is the small local banks who have caused the commercial real estate mess. That's the one you haven't really heard about because it hasn't hit yet. It will in about 6 months, and will be as big of a problem as the sub-prime mortgage problem.
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natrat Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-06-09 04:07 PM
Response to Reply #5
6. that fat little freak pos is wrong in a fundemental and criminal way
every turn he creates legislation giving everything to the crooked big banks. His latest foray into bank regulation gives derivatives the green light making the whole bill toothless. He is so foul and belongs locked up with the rest of these crooks. Are people that stupid that they take anything he says as legitimate.
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