Comments on: Fixing the Banks: Hurry Up, Please

By: zak822

zak822 — Thu, 21 Aug 2008 20:06:00 +0000

“But regulators must face the hard truth, as Merrill Lynch did: “the credit crisis has destroyed the idea that unregulated financial markets always efficiently channel savings to the most promising investment projects”. This means that regulation must be thoroughly revised and capital adequacy rules must be strengthened.”

Ain’t gonna happen. There is no political will for it. And many financial incentives not to do it.

By: Anonymous

Anonymous — Thu, 21 Aug 2008 02:03:00 +0000

The catch 22 is that many of the money center banks need the quarterly profits to somewhat offset the quarterly writedowns, thereby minimizing the need to raise capital.

It could take a while to bleed everything off.

By: joe

joe — Wed, 20 Aug 2008 17:50:00 +0000

"The faster we go here, the further we are behind".

A high perspective of that "capitalize-writedown" leg of the big dilemma.

Notably, as in the other post, the BLAME for the fiasco can be lain at the doorstep of the FED for this country's failure to follow the monetary rules that provide for sustainable economic growth while protecting price stability.
An absolute dismal failure.

With price instability not a countervailing phenom, the sustainability of the commercial and investment banking sectors really became a non-issue.
Laissez-faire capitalism run amok.

We have the FED to thank.
Not only for the money supply growth problem, but in its acceptance of nuanced innovations of things to get traded in the capital markets.
We have money that ain't.

Abolish the FED.

Install a government-issue credit system.
Put the banks on 100 percent reserve basis and let them lend their depositor's money.

Then let those other central bankers that followed us over the speculative-innovative cliff figure out their own means of restoring financial health.

Monetary Reform Now.