Ed's Blog

In the past week, two notable Fed insiders issued stark warnings against risky practices of the big banks.  Both Alan Blinder, now a professor but a former vice-chair of the Federal Reserve, and Richard Fisher, the current Dallas Fed president, called for greater oversight. In Fisher's case, he especially emphasized restricting banks that are still considered "too big to fail." Their reform prescriptions match U.S. PIRG's Wall Street reform platform.

Professor Blinder, in an op-ed in the New York Times titled "Financial Collapse: A 10-Step Recovery Plan," argues that self-regulation is not enough, that risky derivatives must be simplified and traded on transparent exchanges and "that failure to protect unsophisticated consumers from financial predators can undermine the whole economy." He reminds us that we cannot forget such a lesson: "The Consumer Financial Protection Bureau [that Blinder link is to more NYT stories on the CFPB] should institutionalize it." Blinder also calls for less use of leverage and elimination of "perverse" compensation systems: "Offering traders monumental rewards for success, but a mere slap on the wrist for failure, encourages them to take excessive risks."

U.S. PIRG certainly agrees. Yet, a phalanx of industry lobbyists is camped outside both the agencies and the Congress. Instead of further safety implementation, it seeks rollbacks to those Wall Street reforms that both Blinder and U.S. PIRG want maintained and even strengthened. U.S. PIRG stands with Blinder; we have consistently urged the regulators to stand firm. At the same time we have urged the Congress not to weaken the regulators' powers nor take away their funding.

Meanwhile, Richard Fisher of the Dallas Fed, in a speech in Washington, DC called "Ending 'Too Big to Fail': A Proposal for Reform Before It's Too Late," subtitled "(With Reference to Patrick Henry, Complexity and Reality)," said, quoting Henry:

"This is no time for ceremony … [it] is one of awful moment to this country.” Patrick Henry was addressing the repression of the American colonies by the British crown. Tonight, I wish to speak to a different kind of repression—the injustice of being held hostage to large financial institutions considered “too big to fail,” or TBTF for short. [...] [the Wall Street reform law known as] Dodd–Frank does not do enough to constrain the behemoth banks’ advantages. Indeed, given its complexity, it unwittingly exacerbates them."

He goes on to recommend that the 12 largest "mega-banks" be restructured and downsized and that it be made be clear that the federal safety net (both deposit insurance and access to other Federal Reserve benefits) only applies to their commercial banking operations, effectively reinstating a 21st Century version of the post-1929 Glass-Steagall wall between commercial and investment banking.

"In a nutshell, we recommend that TBTF financial institutions be restructured into multiple business entities. Only the resulting downsized commercial banking operations—and not shadow banking affiliates or the parent company—would benefit from the safety net of federal deposit insurance and access to the Federal Reserve’s discount window."

Over at the New York Times, financial columnist Gretchen Morgenson discusses the importance of Fisher's 21st Century approach in her column "How to Cut Megabanks Down to Size:"

"But Mr. Fisher’s plan is more sophisticated than Glass-Steagall, in that it recognizes how complex big financial institutions have become. Glass-Steagall concerned only old-school banking businesses, like making loans, and Wall Street businesses, like trading stocks. Today’s financial behemoths are in so many different businesses that a top-to-bottom restructuring is required."

We agree that Dodd-Frank could have done more to minimize risks from the very small number of mega-banks, which have continued to grow. Although strengthening amendments to the Dodd-Frank Act to limit their size and complexity were defeated or blocked on procedural grounds, there is growing bi-partisan support for breaking up or restructuring the big banks so that the financial system and taxpayers will be better protected.

In December, the Senate passed a community bank-backed provision requiring the Government Accounting Office to study too-big-to-fail; it was sponsored by Sens. Sherrod Brown (D-OH) and David Vitter (R-LA). The GAO has agreed to do the study even though the bill only passed the Senate. There are other conservative voices arguing for greater structural reforms of the big banks. The recently confirmed FDIC vice-chairman, Thomas Hoenig, himself a former regional Fed bank chief, is one of the leading proponents of breaking up the big banks and has long had strong support from conservative Senators including both Richard Shelby (R-AL) and Mitch McConnell (R-KY).

It is encouraging that support for further regulation of the biggest banks, including structural reforms and breakups, is gaining bi-partisan support. The financial system and economy are still recovering from the 2008 collapse brought on by risky practices that resulted in bailing out the biggest banks. Taxpayers and consumers shouldn't have to shoulder that burden again.

Comments

Your article is professional and i learn the useful knowledg which i'm looking for on the internet for so long .Thanks for your article.Yet, a phalanx of industry lobbyists is camped outside both the agencies and the Congress. Instead of further safety implementation, it seeks rollbacks to those Wall Street reforms that both Blinder and U.S. PIRG want maintained and even strengthened. U.S. PIRG stands with Blinder; we have consistently urged the regulators to stand firm.Thanks for your information.
Wonderful article, thanks for putting this together! This is obviously one great post. Thanks for the valuable information and insights you have so provided here.
Defiance Season 1 DVD | Vikings Season 1 DVD sale|Arrow Season 1-2 |Cheap Bones Seasons 1-8 DVD | Hannibal Season 1 DVD|CSI Las Vegas Seasons 1-13 sale | Justified Seasons 1-2 DVD|Cheap Dexter Seasons 1-8

Thanks for a very interesting blog. What else may I get that kind of info written in such a perfect approach? I’ve a undertaking that I am simply now operating on, and I have been at the look out for such info. music

There is no substitute to high quality content. Quality content also plays a major factor in determining your blog’s domain authority. Good quality content also helps in building high quality backlinks naturally http://yoobooy.com/kontes-seo/domino-online-terpercaya-indonesia.html
http://yoobooy.com/kontes-seo/senang.html
unit link terbaik di Indonesia Commonwealth Life investra link http://sooboos.com/asuransi/unit-link-terbaik-di-indonesia-commonwealth-...
Cipto Junaedy http://sooboos.com/property/cipto-junaedy-pemberi-rumah-gratis.php
http://sooboos.com/property/cipto-junaedy.php
http://travelpulautidung.net
http://travelpulautidung.net/memancing-di-pulau-tidung-kepulauan-seribu/
http://agen365.net

Very nice post. I just stumbled upon your blog and wished to say that I have really enjoyed surfing around your blog articles After all I’ll be subscribing to your rss feed and I hope you write again soon! Thank you!

Please check excite information http://arentin.blogspot.com/2014/02/unit-link-terbaik-di-indonesia-commo... Unit link terbaik di Indonesia Commonwealth Life investra link , also don't forget please browse important info http://arisnbw.blogspot.com investra link di Indonesia also cool info http://www.postingku.com Junaedy also info http://arisnbw.blogspot.com/2013/10/ciptojunaedy.html Cipto Junaedy also cool post http://arentin.blogspot.com/2013/05/cipto-junaedy.html Junaedy that's good also important post http://www.aa-gallery.co.id kuningan also important post http://www.aagallery.co.id sentra kerajinan tembaga. Don't for get it!

harus agen casino sbobet terpercaya http://bandar365.com agen judi taruhan bola

I think there are many types of risks that can be avoided. All types of risk would be one good thing for your life in the future in making consideration. tour operators Italy

Risk in a lot of things are things that happen. All the decisions you make will have a risk wherever and whenever you are. Montessori Bellevue

The risk that there will be one valuable lesson for you. You can use many types of these subjects to avoid the same problem. Lexus rims

Maaf, Ane mau Titip link http://mahirseogoogle.blogspot.com/2014/06/adro.html ADRO TEXTILE Konveksi Murah Indonesia – Tlp 081362666444 !

Staffing agencies are really useful, for a wide variety of reasons. Namely, that they enable people to find jobs more easily. HCRC Staffing has been in operation for a number of years now doing just that. Brian Torchin established the company to help out other healthcare professionals in their bids to find meaningful long term work. http://briantorchinhcrc.tumblr.com

https://www.rebelmouse.com/60secondpanicsolutionreviews/
Hey, great blog, but I don’t understand how to add your site in my rss reader. Can you Help me please?

Easily, the article is actually the best topic on this registry related issue. I fit in with your conclusions and will eagerly look forward to your next updates. Just saying thanks will not just be sufficient, for the fantasti c lucidity in your writing. I will instantly grab your rss feed to stay informed of any updates.
Evan Walters

Actually I read it yesterday but I had some thoughts about it and today I wanted to read it again because it is very well written.
Home Design

Mmm.. good to be here in your article or post, whatever, I think I should also work hard for my own website like I see some good and updated working in your site.
John gabriel

Weighing whether or not to use a staffing agency means looking at a couple of factors. In these troubled times, many people are actively looking for work. That's why finding the best method to search for meaningful employment is a necessity. Brian Torchin's HCRC Staffing claims to provide a good alternative for healthcare professionals seeking work. http://www.allvoices.com/contributed-news/16973540-determining-whether-o...

Cheap traffic
Should there be another persuasive post you can share next time, I’ll be surely waiting for it.

Risk when you take the decision will always be there. Especially dealing with the banks. There will be an important consideration that you need to see. 380 Colt Mustang Pocketlight

Yemen Faculty of Humanities
This is a great article, Thanks for giving me this information. Keep posting.

I simply want to tell you that I am new to weblog and definitely liked this blog site. Very likely I’m going to bookmark your blog . You absolutely have wonderful stories. Cheers for sharing with us your blog.
Adult Traffic

There are many effects that can be felt by many people from this area. There are many people who then retreated after knowing this field. Top Alaska Fishing Lodges website

Great, This specific net webpage is seriously thrilling and enjoyment to learn. I’m an enormous fan from the subjects mentioned.
buy facebook likes cheap

This submit is bound to get shared with the whole world. Although, I am going to try and spread this submit as much as I can. I will be placing this particular submit on our Twitter fan page and I believe we'll receive very good responses. https://www.facebook.com/kontorimoobel

Hey, great blog, but I don’t understand how to add your site in my rss reader. Can you Help me please?
buy facebook likes cheap

Thank you for posting such a great article! I found your website perfect for my needs. It contains wonderful and helpful posts. Keep up the good work!
ιστοσελιδας

http://mahirseogoogle.blogspot.com/2014/04/decoder-tv-kabel-berbayar-pia... @ Decoder TV Kabel Berbayar Piala Dunia 2014
http://clorot.blogspot.com/2014/04/kursus.html @ Kursus SEO dan Internet Marketing Terbaik di Jakarta

I really like the dear information you offer in your articles. I'm able to bookmark your site and show the kids check out up here generally. Im fairly positive theyre likely to be informed a great deal of new stuff here than anyone else!
modvigil online

Criminal Background Checks
I would also motivate just about every person to save this web page for any favorite assistance to assist posted the appearance.

I'm so excited to find your post and it's really good.It helps me a lot and thanks for your share.n the past week, two notable Fed insiders issued stark warnings against risky practices of the big banks. Both Alan Blinder, now a professor but a former vice-chair of the Federal Reserve, and Richard Fisher, the current Dallas Fed president, called for greater oversight.This information is useful to me.This is very insightful, it's the kind of information garden owners could use to improve their methods so that the environment is spared too of any form of damage. I used to think that it's easy to control pest but now after owning my own garden I saw it's not that easy.
Trueblood Seasons 1-6 DVD Box set
The Simpsons seaons 1-24 DVD Box set
Cold Case seasons 1-7 DVD Box set
Doctor who Seasons 1-7 DVD Box set
Two and half men Seasons 1-10 DVD Box set
NCIS Seasons 1-10 DVD Box set

Your article is excellent and ican find much important information which i'm concerning.Thanks for your article.Although strengthening amendments to the Dodd-Frank Act to limit their size and complexity were defeated or blocked on procedural grounds, there is growing bi-partisan support for breaking up or restructuring the big banks so that the financial system and taxpayers will be better protected.Yes, you're right.I havent any word to appreciate this post.....Really i am impressed from this post....the person who create this post it was a great human..thanks for shared this with us.
Criminal Minds seasons 1-8 DVD Box set
Game of Thrones seasons 1-3 DVD Box set
The closer seasons 1-7 DVD Box set
The lword seasons 1-6 DVD Box set
Curb your Enthusiasm seasons 1-8 DVD Box set
House MD seasons 1-8 DVD Box set

.the person who create this post it was a great human..thanks for shared this with us. Calgary roofer

This is the initial stage and you definitely do not want to go wrong in this. Figure out the exact size of your shoe for USA and UK both. Have you planed out everything? See agen sbobet in http://vivobetting.net/agen-sbobet-indonesia/ , and visit bola tangkas ligaplayer at http://ligaplayer.com/bola-tangkas

Pretty adequate post. I merely stumbled aloft your web log and basic to say that I acquire extremely enjoyed annual your web log posts
http://echokita.blogspot.com/2013/09/cara-menggunakan-google-calendar-ga...
This article gives the light in which we can observe the reality...

http://echokita.blogspot.com/2013/09/MembuatBlog.html
This article gives the light in which we can observe the reality. this is very nice one and gives indepth information. thanks for this nice article
http://driverresetter.blogspot.com/2014/01/pixma-mg7170-all-in-one-photo...
This is exactly what I was looking for. Thanks for sharing this great article! That is very interesting Smile I love reading and I am always searching for informative information like this!
http://driverresetter.blogspot.com/2014/01/download-pixma-mg7170-driver-...

This is exactly what I was looking for. Thanks for sharing this great article! That is very interesting Smile I love reading and I am always searching for informative information like this!.. Planetwin365 Casinò

This is exactly what I was looking for. Thanks for sharing this great article! That is very interesting Smile I love reading and I am always searching for informative information like this! lawyer office

Kudos to the consumer enforcers over at the Federal Trade Commission outsourcedinterimstaff.com

it's really nice and meanful. it's really cool blog. Linking is very useful thing.you have really helped lots of people who visit blog and provide them usefull information.
Bane Vest

There is lot of information and they are very innovative and informative. I have read the article very well and it seems to me awesome. http://acmbet.net/bola-tangkas-baru/

I really like the dear information you offer in your articles. I'm able to bookmark your site and show the kids check out up here generally. Im fairly positive theyre likely to be informed a great deal of new stuff here than anyone else!
hay day astuces diamants

I just thought it may be an idea to post incase anyone else was having problems researching but I am a little unsure if I am allowed to put names and addresses on here.
barista job description

It was great to see the old printshop and everyone who works there again. I am excited to see a printing business still operating and growing, great job guys
xtrasize opinioni

I simply want to tell you that I am new to weblog and definitely liked this blog site. Very likely I’m going to bookmark your blog . You absolutely have wonderful stories. Cheers for sharing with us your blog.
moviestarplanet hack 2014

Yes, great US Military force. Also, in his post you have given a chance to listen about US Military. I really appreciate your work. Thanks for sharing it. Dermatologia

I would love to stop by. But, I think it might have to wait until this summer. I did not know that Serlkay had ever expanded its size. I must say that a succesful family owned business in this day and age is a very refreshing sight! As well as this is a very refreshing site!
Fundy Discount Code

I like your post. It is good to see you verbalize from the heart and clarity on this important subject can be easily observed. hormone replacement
buy 1 gram gold bars

I would love to stop by. But, I think it might have to wait until this summer. I did not know that Serlkay had ever expanded its size. I must say that a succesful family owned business in this day and age is a very refreshing sight! As well as this is a very refreshing site!
xpress

Pages

Priority Action

The overuse of antibiotics on factory farms is threatening the effectiveness of lifesaving antibiotics. Call on the Food and Drug Administration to put an end to the worst practices.

Support Us

Your donation supports U.S. PIRG’s work to stand up for consumers on the issues that matter, especially when powerful interests are blocking progress.

Consumer Alerts

Join our network and stay up to date on our campaigns, get important consumer updates and take action on critical issues.