Break Up The Big Banks, Yes or No

[Telstra]

Before the debate, i vote No, but after the debate i vote Yes.
How about you ?

 

[JohnnyAnger]

Blow up the banks! Forward the workers bomb!

 

[cgymike]

Does Westpac qualify?

 

[Kabluey]

Does Westpac qualify?

Any bank large enough to damage it's home economy presents a risk.

 

[evanrick]

warren 16?

 

[cgymike]

Umpqua bank is big here


U M P Q U A

Sounds like a KUMQWAT.

 

[lambdaboy]

I was a VP at a bank a Foreign Exchange Trader. Near me were people who traded in instruments that were bazaar and dangerous. For Example an "Interest Rate Swap" Just so to make it clear and simplify It had a principal amount which can is in the millions. No one ever pays or has this amount. The client and the bank base it on (for example) The U.S. Prime Rate and The UK Libor rate. It is gambling if your rate is the Libor and it goes up you win the difference in interest between the two based on the principal amount that no one has put up or has. Guess whose money they are using yours. But no worry's if the bank fails we pay for it, and they still get there bonus and big ones. I did well in my area which was less of a problem as it was based on real money,
.

 

[Telstra]

So, 100% so far for the break up of the big banks ...

 

[cm98059]

It is a double edged sword. We need effective regulation that limits the liability the taxpayer needs to absorb, but the regulations cannot strangle the ability to react to market changes. Too much freedom allows situations like the savings and loan crisis of the eighties and the financial collapse of 2008. Too little freedom, and banks cannot entice new customers bringing with them new capital. Something has to be done about those few banks that have been deemed to big to fail, but in regulating those entities, we need to ensure that we are not placing a burden that stifles growth.

I would like to see salary caps for banking executives, dividend caps on shareholders, liquidity requirements, and limits on the percentage of depositor funds that are allowed to be used in high risk investments. Retail banks, banks that accept customer deposits, should be prohibited from acting as investment firms. Investment firms should be prohibited from offering banking instruments, like checking and savings accounts. If a depositor wants to open a checking account, savings account, apply for a car loan, or apply for a home loan (including a mortgage) they should be able to do that at a bank. If a depositor wants to invest money in the stock market, they should have to go to a investment firm.

There needs to be a reduction of risk. If you have money to play in the stock market, good for you, but the money you, me, or anyone else needs to pay the rent and put food on the table should not be in a high risk investment, placed there by yourself or your bank. Also if you have the money to invest in the stock market or other investment instruments, you need to be taking the risk for the loss of that money, not me and every other person who pays taxes. If I were a bank, and I am asking you to deposit your money with me, and this is money that you need to pay the rent (or mortgage), I should be prohibited from putting your money at risk. But, if you have money that you want to risk, and you are willing to accept the risk that your money may be lost, then that money should be directed into an investment firm, and kept separate from the money you need to pay your mortgage or buy food. Most of us would not take our last $5.00 to the casino, why would we want our bank to take our last $5.00 to the casino called Wall Street?

 

[Telstra]

I was surprised that JP Morgan is a bank.
It sounds like someone's name.