Los Angeles voters and California legislators exploring the public bank option may be breaking not just from Wall Street but from the Federal Reserve.
The Federal Reserve just eliminated municipal bonds from its list of high-quality liquid collateral assets. Banks are liable to start dumping them in favor of Treasuries and corporate bonds. The cost of credit will increase for municipal governments and decrease for corporate and financial institutions, and power and financial resources will be further shifted from the public sector to the private sector.
Taxpayers are paying billions of dollars for a swindle pulled off by the world’s biggest banks, using a form of derivative called interest-rate swaps. And the Federal Deposit Insurance Corporation has now joined a chorus of litigants suing over it.
The first of a planned three-part series on the dangers of private banking highlights government documents describing plans to confiscate the deposits of individuals as well as cities, universities, counties and pension funds when another banking crash occurs.
The new rules for keeping the too-big-to-fail banks alive allow for the use of creditor funds, including uninsured deposits, to recapitalize failing banks. In the event of another crisis, access to your money would depend on the security of the FDIC. The question, then, is how reliable is the FDIC?
With taxpayer bailouts no longer an option, a major derivatives crisis could transfer money currently held by state and local governments and citizens -- secured and unsecured, insured and uninsured -- into the hands of derivative claimants.
Confiscating customer deposits in Cyprus banks was not a one-off, desperate idea of a few eurozone “troika” officials scrambling to salvage their balance sheets. A joint paper by the U.S. Federal Deposit Insurance Corporation and the Bank of England, dated Dec. 10, 2012, shows these plans have been long in the making.
Few voices in the regulatory community called for the expulsion of derelict executives and the means to force banks to lend bailout money to the public amid the 2008 financial crisis. Former FDIC Chairman Sheila Bair was among them.Few voices in the regulatory community called for the expulsion of derelict executives and the means to force banks to lend bailout money to the public.
The presidential campaign got a jolt this week with an uplifting jobs report and a big debate win for Mitt Romney. The falling unemployment numbers released Friday have skeptics wondering whether unemployment could have dropped 0.3 percentage points last month, just in time for President Obama's campaign to tout it. The "Left, Right & Center" panelists dissect the implications of these matters and more on this week's program.