thedailybell.com /By Staff Report / March 13, 2013
Dallas Fed’s Fisher: Three Ways to Curb Too-Big-to-Fail Banks … Despite honest efforts by the government since the financial crisis, too-big-to-fail banks haven’t been reined in, says Dallas Federal Reserve Bank President Richard Fisher. Just 12 huge banks hold almost 70 percent of the assets in the U.S. banking industry, he and Dallas Fed research director Harvey Rosenblum write in The Wall Street Journal. The current system is “patently unfair,” they say. “It makes for an uneven playing field, tilted to the advantage of Wall Street against Main Street, and it places the financial system and the economy in constant jeopardy.” – Newsmax
Dominant Social Theme: We have to get these pesky “big ‘uns” under control.
Free-Market Analysis: Top Federal Reserve “big brain” Richard Fisher is back with his prescription for fixing what has gone wrong with the US’s financial economy. He has a three-part solution.
First, the federal government ought to provide deposit insurance and access to the Fed’s discount window only to traditional commercial banks. That means that non-bank affiliates of bank holding companies or the parent companies themselves need not apply.
Second, non-bank affiliates and the parent holding companies would make it clear via a signed disclosure statement that the federal government did not guarantee client investment.
Third, the largest financial holding companies should be restructured so that they facilitate a bankruptcy process and are easy to break up.