Bankers Need To Recconect With Their Morals?

[Gawdzilla Sama]

Yadayada.

[Seth]

Yadayada.

Go take another Vicodin.

[MrJonno]

Still think its amazing the US government has given billions to banks and got nothing back in return. At least in the UK and the rest of the world we got some shares and will get a return. A lot of bank CEO's are now public sector employees! . A few British banks refused HSBC being notable for this

[Seth]

Still think its amazing the US government has given billions to banks and got nothing back in return. At least in the UK and the rest of the world we got some shares and will get a return. A lot of bank CEO's are now public sector employees! . A few British banks refused HSBC being notable for this

Not true. Many of the banks have fully repaid the TARP money, and as I said, the notion of nationalizing the banks in this manner is repugnant to our system and would never be accepted. Even the notion of the Federal Reserve is under heated debate and scrutiny, much less the government taking over banks. It just closes them and sells the assets to other, bigger fish, whom it can control more easily. Pretty much the same result without all the public outrage...until the public actually figures out that the Feds are trying to destroy independent banking in the US so they can centralize all banking in a few major players who, in typical Progressive fashion, can be tightly controlled by the Executive Branch, which creates defacto nationalization without all the fuss.

[MrJonno]

Making risky loans of tax payers money to the bank with no collateral is very foolish, no commercial organisation would do it but its fine for taxpayers money

[Seth]

Making risky loans of tax payers money to the bank with no collateral is very foolish, no commercial organisation would do it but its fine for taxpayers money

Yes, you are absolutely right, and TARP should never have happened as it did. If "relief" was called for, it should have been direct relief to MORTGAGEES, to pay down, or pay off their mortgages, leaving them in the clear. The banks should have been told to go hang and been shut down by the FDIC, and a large number of people should still be prosecuted for what happened.

But it did happen, and you are wrong when you assert that the government "got nothing" back. TARP is not a giveaway, it's a LOAN, and banks will have to pay it back eventually, or go bankrupt.

[Cormac]

Ladies and Gents, in terms of Capital Adequacy, (the ratio of Capital to Value at Risk (i.e. money loaned or gambled)) that a bank needs to hold can be, if a bank is advanced enough under the Basel Accords, can be as low as a few percent.

This means that for a $100 loan, they'd need to have $2-$5 in cash or some other form of relatively stable assets - government bonds and the like.

So an "adequately" funded bank could be one where if it had to liquidate in the morning, it would only be in a position to recover $2-$5 for every $100.

That is waht it means to be an advanced and totally compliant bank.

It is based on the ratios of VAR (Value at Risk) and RWA (Risk Weighted Asset) under the Basel II accords, which set the global rules for banking and Risk.

Naseem Nicholas Taleb and others have publicly exploded the notion the VAR and its related concepts are useful to underpin Risk Management strategies.

[Cormac]

Still think its amazing the US government has given billions to banks and got nothing back in return. At least in the UK and the rest of the world we got some shares and will get a return. A lot of bank CEO's are now public sector employees! . A few British banks refused HSBC being notable for this

That is because HSBC has a more conservative approach, and maintains a higher level of deposits to loans and money at risk. Consequently, I don't think it was every illiquid.

This is because it behaved like a bank should, and didn't turn into a casino throwing depositors money on repeated spins of the wheel.

Also, banks like to pretend that they are private entities and only owe loyalty to their shareholders - but the fact is, in every country, bank operations are underpinned by the market knowledge that the State will ultimately step in and save the bank. (The Lehman's disaster was the exception that proved the rule).

Because they operate with such a privileged guarantee, they have to answer to the government who are charged with stewardship of the people's money. (By which I mean - governments need to be bloody careful what happens with Tax, and should pay close attention to the activities of banks and other financial services enterprises).

[Cormac]

Making risky loans of tax payers money to the bank with no collateral is very foolish, no commercial organisation would do it but its fine for taxpayers money

Yes, you are absolutely right, and TARP should never have happened as it did. If "relief" was called for, it should have been direct relief to MORTGAGEES, to pay down, or pay off their mortgages, leaving them in the clear. The banks should have been told to go hang and been shut down by the FDIC, and a large number of people should still be prosecuted for what happened.

But it did happen, and you are wrong when you assert that the government "got nothing" back. TARP is not a giveaway, it's a LOAN, and banks will have to pay it back eventually, or go bankrupt.

I agree.

[MrJonno]

Whether or not governments should loan money to banks in trouble is one matter, but I can not see how it can be possible more responsible in at least getting someone for your money like ownership

[laklak]

[Svartalf]

After what they did, the state had no business using tax money (or more like increasing the national debt) to loan to the banks.
At best, bailout money should have been clear investment, affording the state an interest in the banks proportional to the money fronted vs the bank's actual assets (as opposed to phantom capital subject to the share price dropping)... or maybe the state should have done like was done in Europe after the fall of the Nazi regime, and companies whose owners were convicted of getting in bed with the Germans were simply seized as punishment for their crimes.

[Cormac]

Whether or not governments should loan money to banks in trouble is one matter, but I can not see how it can be possible more responsible in at least getting someone for your money like ownership

hatstand?

[Cormac]

After what they did, the state had no business using tax money (or more like increasing the national debt) to loan to the banks.
At best, bailout money should have been clear investment, affording the state an interest in the banks proportional to the money fronted vs the bank's actual assets (as opposed to phantom capital subject to the share price dropping)... or maybe the state should have done like was done in Europe after the fall of the Nazi regime, and companies whose owners were convicted of getting in bed with the Germans were simply seized as punishment for their crimes.

Yep.