Obama keeping ‘to big to fail’
I agree with Paul Volcker that the current policies being put forward by the Obama administration and the Senate Banking Committee will allow ‘to big to fail’ to continue, and I agree with Volcker that this is a bad thing. I disagree with Volcker about the decision to save AIG and GM. I think we pretty much had to do those things, but I would like to not have to do such things again in the future. I do NOT want a safety net for our financial system as being proposed. Hell I disagree with Volcker about only having a safety net for commercial banks.
What I want is a federal system in place, like FDIC, that can swoop in and dismantle even the largest of banks while maintaining a minimum customer account. Customers do not lose out when a smaller bank goes bankrupt because the FDIC guarantees bank deposits. The owners or stockholders DO lose out which is as it should be, their investment vehicle failed. This should be the case for all financial institutions. The reason we had to use tax payer’s money to save AIG, and the ‘big banks’ was because letting them die would have completely crushed the US/world economy. Hell, even saving them the way we did, still caused many corporations to fold because they were to close to the brink to start with.
If the government isn’t willing to create such a organization, like FDIC, for ALL banks, including the biggest, then create regulation that won’t allow ANY financial institution to handle more than say 5% of all transactions in this country. Otherwise, we’re just in the ‘pre’ phase of another bailout.