Should Megabanks Be Broken Apart?

Sanders Statement on Fed Disclosure
WASHINGTON, Dec. 1 - Sen. Bernie Sanders (I-Vt.) issued the following statement on today's disclosure by the Federal Reserve that banks and other institutions received an estimated $3.3 Trillion in emergency loans and other assistance during the Financial Crisis: "After years of stonewalling by the Fed, the American People are finally learning the incredible and jaw-dropping details of the Fed's multi-trillion-dollar Bailout of Wall Street and Corporate America. Perhaps most surprising is the hu...

Should Megabanks Be Broken Apart? (NYT Room For Debate)
“Creating the structures to allow for the orderly failure of a large Financial Institution starts with giving Regulators the authority to facilitate failures when they occur. Under such a system, a failed bank’s shareholders should lose their value; unsecured creditors should be at risk and, if necessary, wiped out. A regulator should be able to terminate management and boards and liquidate assets. Those who benefited from mismanaging risks or taking on inappropriate risk should feel...

AIG to repay $21bn emergency loan
American International Group (AIG), the troubled giant US insurer, is to repay one of the emergency rescue loans it received during the Financial Crisis. It will repay the remaining $21bn outstanding from a $91bn loan from the Federal Reserve Bank of New York. The move will pave the way for the US Treasury to sell a fifth of the insurer on the Stock Exchange early next year. The Treasury currently owns 80% of AIG, although this will rise to some 92% before the planned share selloff. AIG also pla...

AIG takes key step to pay off largest bailout
WASHINGTON (AP) — Bailed-out Insurance conglomerate American International Group Inc. is taking a key step toward paying off a Bailout that was at one point worth $182 billion — the largest of the Financial Crisis. The company says in a public filing Wednesday that it will pay off a loan from the Federal Reserve Bank of New York. AIG says that will clear the way for the Treasury to sell off the government’s stake. Treasury’s stake in AIG will temporarily rise from roughly...

AIG Takes Big Step To Pay Off Government Bailout
WASHINGTON — Bailed-out Insurance conglomerate American International Group Inc. is taking a key step toward paying off a Bailout that was at one point worth $182 billion – the largest of the Financial Crisis. The company says in a public filing Wednesday that it will repay a loan from the Federal Reserve Bank of New York. AIG says that will clear the way for the Treasury to sell off the government's stake. Treasury's stake in AIG will temporarily rise from roughly 80 percent to 92...

The Fed's Commercial Paper Buying Knew No National Boundaries
During the heat of the Financial Crisis, Ben Bernanke's Federal Reserve doled out a mountain of money to keep the damage from getting any worse. But if you think American companies were the biggest beneficiaries of this largess, you'd be wrong. Foreign companies landed a whopping 68% of the billions of dollars the Fed spent as part of its lender-of-last-resort Commercial Paper Funding Facility (CPFF), according to a DailyFinance review of data the Fed has recently released. During the nearly 1...

AIG Takes Key Step To Pay Off Largest Bailout
Insurance conglomerate American International Group Inc. is taking a key step toward paying off a Bailout that was at one point worth $182 billion   the largest of the Financial Crisis. The company says in a public filing Wednesday that it will pay off a loan from the Federal Reserve Bank of New York. AIG says that will clear the way for the Treasury to sell off the government's stake. Treasury's stake in AIG will temporarily rise from roughly 80 percent to 92 percent, as part of the deal. AIG...

AIG, Treasury plan big stock sale: sources
By Paritosh Bansal and Ben Berkowitz NEW YORK | Wed Dec 8, 2010 2:24pm EST NEW YORK (Reuters) - The Treasury could cut its stake in bailed-out insurer American International Group Inc by a fifth through a large stock offering in the first half of 2011, sources familiar with the matter said. AIG and the Treasury would both sell stock in the offering, which could total more than $10 billion, according to the sources. That would place it among the largest U.S. stock offerings in history. The sou...

AIG, Treasury plan big stock sale: sources
The American International Group (AIG) building is seen in New York's financial district March 16, 2009. NEW YORK (Reuters) - The Treasury could cut its stake in bailed-out insurer American International Group Inc by a fifth through a large stock offering in the first half of 2011, sources familiar with the matter said. AIG and the Treasury would both sell stock in the offering, which could total more than $10 billion, according to the sources. That would place it among the largest U.S. stock o...

Fed to unveil debit card fee rules December 16: sources
WASHINGTON | Wed Dec 8, 2010 4:26pm EST WASHINGTON (Reuters) - The Federal Reserve is expected to unveil a proposed rule next week that would limit the transaction fees that banks can charge Retailers when a customer uses a debit card, according to two industry sources familiar with the matter. The rule, mandated by the Financial Reform law enacted in July, is expected be on the agenda for a December 16 board meeting, according to the sources. Federal Reserve officials have only said publicly...

Fed said to unveil debit-card fee limits next week
By Dave Clarke WASHINGTON | Wed Dec 8, 2010 7:02pm EST WASHINGTON (Reuters) - The Federal Reserve is expected to unveil a proposed rule next week that would limit the transaction fees that banks can charge Retailers when a customer uses a debit card, according to two industry sources familiar with the matter. The rule, mandated by the Dodd-Frank Financial Reform law enacted in July, is expected to be on the agenda for a December 16 board meeting, according to the sources. Federal Reserve offi...

Fed said to unveil debit-card fee limits next week
WASHINGTON (Reuters) - The Federal Reserve is expected to unveil a proposed rule next week that would limit the transaction fees that banks can charge Retailers when a customer uses a debit card, according to two industry sources familiar with the matter. The rule, mandated by the Dodd-Frank Financial Reform law enacted in July, is expected to be on the agenda for a December 16 board meeting, according to the sources. Federal Reserve officials have only said publicly that a rule is expected soo...

Electronic payments crowd out checks in US: Fed
A man uses a Laptop computer at a wireless cafe. Electronic payments have s... Electronic payments have surged in the United States to more than 75 percent of all noncash payments as check usage continues to fall by the wayside, a Federal Reserve report showed Wednesday. All types of US electronic payments grew in the 2006-2009 period studied, with the exception of Credit Cards, the Fed said. Wire transfers were not included in the triannual study, whose latest edition spans the worst US reces...

Fallout After The Credit Bomb
. Bank credit and liquidity is something I follow closely because it is a key to economic revival. Presently banks have been more aggressive in cleaning up their loan books which has required them to recognize troubled loans and reserve more for loan losses. Part of the trend is that bank Regulators have been stricter with banks, requiring them to move loans to non-accrual status or "other Real Estate owned" status. Most of these loans are commercial Real Estate loans (CRE). Another part of the ...

Emerging Market Mania: China Tells Bernanke to Take a Hike
dynamic for the Financial Markets going forward. How this plays out will impact everything from the US Dollar’s reserve currency status to where the Stock Markets will head. With that in mind, we need to consider the power dynamics between these two countries from a monetary perspective. China has made it clear that it is NOT pleased with the US’s current Monetary Policy (China has blamed the Fed for its Inflation woes with some officials going so far as to label The Dollar’s...

More Grim Comedy from Ben Bernanke
"The incompetence that Bernanke has displayed over the past few years makes the Cincinnati Bengals look like a model of excellence," the always excitable Michael Snyder writes at DailyMarkets.com. "Bernanke kept insisting that the Housing Market was stable even while it was falling apart, he had absolutely no idea the Financial Crisis was coming, he declared that Fannie Mae and Freddie Mac were in no danger of failing just before they failed, his policies have created asset bubble after asset b...

More on states going bankrupt, this time with added Felix Salmon goodness
Felix Salmon — who, like me, works at Reuters but, unlike me, is officially a citizen of no nation and operates from specially modified Yakovlev “Yak” 77 that only lands to refuel and take on provisions — comments on my post about GOP plans to push states into Bankruptcy: If it were implemented, or if it even looked like it might get implemented, prices of municipal bonds would plunge, and most states would find it pretty much impossible to borrow money. As such, facin...

Sarah Palin: Hell no to bailing out the states
Posted by Jennifer Caballero on Dec 8 2010 Filed under News & Opinion, Politics. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry The government was obsessively engaging in Bailout mania for the past couple of years. But one Bailout that will surely have strong ramifications for our economy is that of bailing out states. California and New York are two of the several states that is on the precipice of Bankruptcy and might ...

Are Republicans Trying to Bankrupt States?
This certainly sounds like the sort of thing that political Conspiracy theorists would talk about in dimly lit D.C. bars: are the Republicans secretly planning to force fiscally troubled states to declare Bankruptcy? As crazy this might be to imagine, James Pethokoukis at Reuters actually makes the idea sound pretty plausible. The purpose would be twofold: to avoid a Bailout of State Governments and to stick it to Public Employee Unions. As proof that this might really be on the minds of Republ...

DC37 to March on Golden, Lanza Offices Over OTB
Laid-off OTB workers are slated to march on the district offices of Senators Andrew Lanza of Staten Island and Marty Golden of Brooklyn this afternoon after both Republicans voted against the rescue package that would have save New York City's Off-Track Betting operation. "Our people saw first-hand how heartless some elected officials can be," said Lillian Roberts, president of DC37, which is organizing the march. "To vote on Tuesday to shut down OTB at midnight - just on the eve of what is s...

Is there a secondary market in Madoff claims?
What’s even less probable than the government breaking even on its AIG Bailout? How about Bernie Madoff’s investors getting all their money back? That’s what Stephen Gandel reckons might happen: In the past few weeks, Irving Picard, the Bankruptcy trustee in the financial Fraud case has issued a flurry of Lawsuits and settlements. The trustee netted $500 million on Monday alone in a settlement with Swiss bank Union Bancaire Privee. Picard’s moves are raising the possibil...

Treasury plans to wind down AIG investment next year
The American Taxpayer will be recoup its Bailout investment in the American International Group more quickly under a transaction agreement the Insurance company has entered into with the Treasury Department, the Federal Reserve Bank of New York, and the trustees of the AIG Credit Facility Trust. By March 15, the federal government plans to sell a substantial portion of its shares in AIG, the Treasury announced. Under the agreement, the transaction will pay off the Federal Reserve's loan to AIG...

Treasury's shock and awe on AIG
Treasury's Shock and Awe on AIG Posted by Colin Barr December 8, 2010 4:59 pm No doubt about it, Treasury can't get out of AIG fast enough. AIG (AIG), Treasury and the Federal Reserve on Wednesday finalized the terms of the latest restructuring of the giant insurer's Bailout. Under the arrangement, the outlines of which were announced in September, AIG borrows money from Treasury to repay its remaining borrowings from the Fed, leaving Treasury with 92% of the company's common stock. That dea...

Ease the Day
Of all the strange things that Republicans have freaked out over during the last two years—a federal version of Mitt Romney’s Health Care plan, a continuation of George W. Bush’s bank Bailout, a failed attempt to implement John McCain’s Climate Bill—perhaps the strangest target is Milton Friedman’s monetary policies. Yet here we are. Last month, the Federal Reserve announced it would purchase $600 billion in Treasury Bonds in order to push down long-term inter...

Treasury's shock and awe on AIG
No doubt about it, Treasury can't get out of AIG fast enough. AIG (AIG), Treasury and the Federal Reserve on Wednesday finalized the terms of the latest restructuring of the giant insurer's Bailout. Under the arrangement, the outlines of which were announced in September, AIG borrows money from Treasury to repay its remaining borrowings from the Fed, leaving Treasury with 92% of the company's common stock. That deal is  expected to close in March. "Today's announcement is a milestone in th...