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Too Big To Monitor

Posted by labrea 7NYC (My Page) on
Tue, Jan 22, 13 at 23:35

We had too big to fail but we also now have to big to keep tabs on.
Jamie Dimon was caught off guard with JP Morgan's London Whale. (that is what happened)
We have a Banking Committee seeking less over site & looser regulations. (you have some clowns want no regulations)
Then You Have an article like this which

Is this an Iceberg we will hit this year or will be driven into. It was estimated that thousands of monitors working hundreds of hours couldn't keep track of HSBC's business & it's subsidiaries.

Federal Reserve Bank of Dallas President Richard Fisher said banks deemed too big to fail must be broken apart to prevent the next financial crisis from happening.

“We recommend that TBTF financial institutions be restructured into multiple business entities,” Fisher said in the text of prepared remarks in Washington today. “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.”

Here is a link that might be useful: whatcha got there? Dunno!


Follow-Up Postings:

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RE: Too Big To Monitor

They couldn't see the money... Lol!


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RE: Too Big To Monitor

Well it's also a big topic of discussion today at Davos!
On 6 January, the Basel Committee agreed to ease and delay for another four years a planned bank liquidity rule which was expected to be established by 2015.
Looked like Banks weren't going to be able to maintain the required liquidity and carry on Business.

This work was all just completed in Brussels this past Summer after reviewing weaknesses and poetential problems in the world of shadow banking!

Here is a link that might be useful: Chop shop


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RE: Too Big To Monitor

So, your first link talks about how HSBC is so big that nobody - including themselves - knows what their bank is doing. but analysts do: "

HSBC remains, however, a strong favorite with analysts. Of 33 covering the stock, 22 rate it a "buy", eight have a "hold" rating and just three consider it a "sell", according to Reuters data.

"I think a private client can be reasonably confident that the HSBC dividend is sustainable, that they have good management in place and that the bank is not unduly exposed to high-risk areas," said Algernon Percy, head of private clients and manager of the JO Hambro Investment Management Portfolio Fund and an HSBC shareholder."

And I did enjoy these few paragraphs from the 2nd link:

Pandit was co-chairman of the 2012 meeting. "Trust has been broken," he said at a press conference then. "Banks have to serve clients, not serve themselves."

Less than three months later, shareholders rejected the bank's executive-pay plan amid criticism that it allowed Pandit to collect rewards too easily. Pandit, 56, sold his hedge fund to Citigroup for $165 million and received about $15 million in cash over five years at the company. He was replaced in October by Michael Corbat, 52, who will be in Davos this week.

In 2011, Diamond told Bloomberg Television in Davos that the financial industry hadn't done a good enough job educating the public on "how we add to the quality of their lives" and said "we need to regain the trust of the public."

Diamond resigned in July after Barclays was fined 290 million pounds ($459 million) for attempting to manipulate the London interbank offered rate, or Libor. His departure came after U.K. regulators said they had lost confidence in Diamond, 61. His successor, Antony Jenkins, 51, will be in Davos.

Yup, still need to know how these guys making tens of millions a year while rigging the markets 'adds quality to my life'. Aside from entertainment value.....


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RE: Too Big To Monitor

The threat to Europe was if you enforce these requirements that we be liquid enough (whats enough?) we will not be able to loan money! Summers resolve gone by Winter! Be afraid be very afraid!


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RE: Too Big To Monitor

In 2011, Diamond told Bloomberg Television in Davos that the financial industry hadn't done a good enough job educating the public on "how we add to the quality of their lives" and said "we need to regain the trust of the public."

Diamond resigned in July after Barclays was fined 290 million pounds ($459 million) for attempting to manipulate the London interbank offered rate, or Libor. His departure came after U.K. regulators said they had lost confidence in Diamond, 61.

Words fail.



But not entirely -- people complain about politicians lying but seem to lack the necessary skepticism when CEOs make grand statements.


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RE: Too Big To Monitor

Well I see the fiscal conservatives aren't again LOL! Must be a new Doll house to play with!


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RE: Too Big To Monitor

For your reading pleasure...

Here is a link that might be useful: Analysis


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RE: Too Big To Monitor

Thanks that was useful The concern is that Basel 3 is not going to be implemented when it was supossed to.
It covers Bank lending yet hedge fund & PE lending or shadow banking is still an area of concern.
"With banks capital constrained, hedge funds are already moving into lending alongside PE firms, asset managers and lending between companies" (Ernst & Young)

Higher capital requirements means that banks will have to put aside a lot more capital if they want to lend to hedge funds. Basel lII was weakened so that Banks consider a number of assets previously not permitted as liquidity.

I feel a little better since China has promised to be vigilant in monitoring the shadow banking industry in the last few days.

"China's banking regulator has said at a 2013 work conference that the government's top task this year will be to strictly control three types of risks, the most notable among them being business-related risk and external risk.

The China Banking Regulatory Commission will strictly monitor the design, sales and capital flows of financial products and strictly prohibit banks from selling private equity funds, said CBRC Chairman Shang Fulin.

The problems within China's shadow banking system have been seen by the market as the biggest threat to the country's financial stability. The shadow banking system is a collection of non-bank financial intermediaries that provide services similar to commercial banks.

There has even been a trend for shadow banks to replace local government financing vehicles. Foreign institutional investors estimate that the size of the country's shadow banks has reached 15-17 trillion yuan (US$2.4 trillion-$2.73 trillion), accounting for one-third of China's GDP."

Here is a link that might be useful: Plasma


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