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Richard Fisher, President Dallas Federal Reserve Presses Tough Banking Reform
“Regulators have, for the most part, tiptoed around these larger institutions [big banks]. Despite the damage they did, failing big banks were allowed to lumber on, with government support. It should come as no surprise that the industry is unfortunately evolving toward larger and larger bank size with financial resources concentrated in fewer and fewer hands.” ~Richard Fisher
The words of Richard Fisher, president of the Dallas Texas Federal Reserve Bank, confirm what we have believed since the beginning of this debacle in banking in the United States.
The fact is our government has helped the banking scoundrels to perpetrate their fraud on the tax payers. We get to share the losses that result from the poor decisions made by the so-called experts; however when the crisis ends and prosperity reigns, We, the People, will only share or benefit in a very minuscule amount compared to the debt we, our children, their children and their children’s children will carry for years far into the future.
And now Richard Fisher tells us if we do not finally crack down now on this industry, as it is behaving as a wayward child, the industry will be even more unwieldy as it grows larger and bigger banks.
“Based on these considerations, coupled with studies suggesting severe limits to economies of scale in banking, it seems that mostly as a result of public policy—and not the competitive marketplace—ever larger banks have come to dominate the financial landscape. And, absent fundamental reform, they will continue to do so. As a result of public policy, big banks have become indestructible. And as a result of public policy, the industrial organization of banking is slanted toward bigness.”
We must demand the Obama administration get tough with the bankers. The POTUS comes from a family of bankers. His grandmother and his mother both were involved on different levels with the industry. In his formal and familial education we are certain he knows of, and follows in his personal life, good banking practices.
President Obama must join Richard Fisher in his call for strong, tough regulation of the bankers.
“It is my view that, by propping up deeply troubled big banks, authorities have eroded market discipline in the financial system.”
Why isn’t this guy Treasury Secretary? He’s certainly got the background.
Moreover he’ sensible in his pronouncements.
“…the financial regulatory reform bill has left regulators (specifically, the Board of Governors and the Federal Deposit Insurance Corp.) with the authority to impose greater restrictions on firms whose living wills are not credible. That authority, as I mentioned previously, could include “[divesting] certain assets or operations … to facilitate an orderly resolution.”
We agree. The regulators have the power to bring the bankers into proper regulatory compliance. We urge the officials to agree and act on Richard Fisher’s suggestions decisively.
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