The Bank Run We Knew So Little About

By EmmaZahn on Sun, 04/03/2011 - 2:54pm |

More information from the Fed's recent data dump although the interpretation could be better.

The structure of the Federal Reserve System was such that it could only enact monetary policy through its Primary Dealer system -- an add-on to the System ~1960. Of the banks listed as borrowers in the article are all or almost all Primary Dealers. If they start failing, they not only drag each other down but maybe the Fed as well.

That is the main reason I think it would be good to rethink the FRB system and maybe add another arm to Treasury to act as a public counterparty to the Fed.

URL:

http://www.nytimes.com/2011/04/03/business/03gret.html

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Better yet have better regulations on the banks period. But then I then to be a bit of a dreamer.

by cmaukonen on Sun, 04/03/2011 - 11:38pm

Why is everyone so enamoured of regulations?

Finance is already one of the most regulatied industries there is ---even after many of them were lifted. Even if 'better' regulations are piled on all that will happen is maybe a few more back office people will be hired to deal with them. Oh, and they will eventually become impotent as money finds another way to do what it wants.

You claim to be a socialist and you don't even want a public bank?

by EmmaZahn on Sun, 04/03/2011 - 11:56pm

I would like a public bank like they have in Montana or some such. The way the FED is set up, it's not really answerable to anyone. But really, I currently have very little use for commercial banks right now. And for very good reasons, I think.

by cmaukonen on Mon, 04/04/2011 - 12:02am

"Meanwhile, the poor Babel fish, by effectively removing all barriers to communication between different races and cultures, has caused more and bloodier wars than anything else in the history of creation." - Douglas Adams

by cmaukonen on Mon, 04/04/2011 - 12:59am

Darmok and Jalad at Tanagra

by EmmaZahn on Mon, 04/04/2011 - 1:03am

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