Banks Choose Anyone Except Insurance Regulators.
"Financial institutions cannot be relied upon to do the right thing, when doing the wrong thing will line their pockets. Regulators, not banks, need to set the rules and they must be clear, straightforward, and readily enforceable.... It's time to stop timidly working around the edges and get the job done."
Sheila C. Bair, former Chair of the Federal Deposit Insurance Commission and current Chair of the Systemic Risk Council, in an op-ed column entitled, "Two Years After Dodd-Frank, Why Isn't Anything Fixed?" published online by Yahoo! Finance, The Exchange, Friday, July 20, 2012.
Investment banks caused the Great Recession. That is a fact.
It is also unquestionable that for four years, since October, 2008, investment banks and their regulators have tried to divert everyone's attention away from investment banks and their regulators. "[T]axpayers and the many smaller banks that pay into the F.D.I.C. fund that insures bank deposits were those most likely to be assigned responsibility for the bailout costs, Ms. Bair writes. Needless to say, these people had no seats at the rescue tables." Gretchen Morgenson, "Fair Game / Big Questions From a Bailout Eyewitness" p. 1, col. 1 (New York Times Nat'l ed., "SundayBusiness" Section, Sunday, October 14, 2012), citing Sheila Bair's recently published Book, "Bull By The Horns: Fighting to Save Main Street From Wall Street and Wall Street From Itself".
Ms. Bair's observations about Citigroup's former CEO, Vikram Pandit, provide a past example -- and a present insight. She writes that Mr. Pandit and Citigroup's regulator in October, 2008, Mr. Timothy Geithner of the New York Federal Reserve Bank, held her responsible for Wells Fargo rather than Citigroup acquiring Wachovia and its subprime mortgage loan department.
Her description of Mr. Pandit is insightful, as she explained why she thought that Mr. Pandit was a poor choice to become the CEO at Citi:
He was a hedge fund manager by occupation and one with a mixed record at that. He had no experience as a commercial banker, yet now he was heading one of the biggest banks in the country.
Sheila C. Bair, "Bull by the Horns: Fighting to Save Main Street From Wall Street and Wall Street From Itself" (Free Press , a division of Simon & Schuster, Inc., 2012), excerpted online in CNN Money (September 20, 2012) and Fortune Magazine (October 8, 2012).
Those who have ears to hear, let them hear.
The price of the Great Recession Bailouts includes enormous unaccounted costs for "the subsidies banks received in cheap capital, low-interest-rate loans and debt guarantees." ." Interview with Sheila C. Bair reported by Gretchen Morgenson in "Fair Game / Big Questions From a Bailout Eyewitness" p. 1, col. 1 (New York Times Nat'l ed., "SundayBusiness" Section, Sunday, October 14, 2012). The costs of the Great Recession also include those falling upon Mortgage Insurance Companies and Title Insurance Companies for the Mortgage defaults engineered by the investment banks. See the Categories on this Blog, "Mortgage Insurance" and "Title Insurance," and the corresponding Categories on Insurance Claims and Issues Web Log.
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