Bank Regulation

Foreclosed Upon Americans Get Chump Change While Banks Erode Regulations

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bankstersgThe Federal Reserve and the Office of the Comptroller of the Currency are cutting an $8.5 billion deal against ten of the largest banks for their systematic foreclosure and loan modifications abuse which resulted in millions losing their homes. From the settlement press release.

Leapin' LIBOR - Banks Busted For Manipulating InterBank Interest Rates

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rouletteBarclays was busted for manipulating the LIBOR. The London Interbank Offered Rate is the interest rate banks charge to lend to each other. This key interest rate sets most banking transactions, including retail. Manipulating the Libor is like being a casino with crooked roulette wheels and loaded dice.

Barclays has been fined £290m ($450m) for trying to manipulate a key bank interest rate which influences the cost of loans and mortgages.

Barclays' Chairman just stepped down:

Marcus Agius will step down from Barclays as soon as Monday, amid fallout from the bank's $453 million settlement of probe into Libor manipulation.

On Wednesday the U.K's Financial Services Authority announced to the world Barclays manipulated the Libor and was fined. Below is some of the FSA's press release:

The FSA has today announced that it has found serious failings in the sale of interest rate hedging products to some small and medium sized businesses (SMEs). We believe that this has resulted in a severe impact on a large number of these businesses. In order to provide as swift a solution to this problem as possible we have today confirmed that we have reached agreement with Barclays, HSBC, Lloyds and RBS to provide appropriate redress where mis-selling has occurred.

How far does corruption with banking regulators reach?

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There are regulatory agencies with good reputations, and then there are agencies with bad reputations. There are bad ideas, and then there are criminally bad ideas. That's why it is so disturbing to see a regulatory agency with a good reputation like the FDIC propose a criminally bad idea.

(AP) — Regulators may borrow billions from big banks to shore up the dwindling fund that insures regular deposit accounts.

Regulation Power - Where are the Checks and Balances?

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Before us we have the proposal to expand the powers of the Federal Reserve as the systemic risk regulator.

Consider this:

Thus within 18 months of taking office, Obama will likely have appointed five of the seven Fed governors . The central bank is designed to be independent from politics, so a president's best chance of influencing how the Fed will regulate banks or respond to economic changes is through these appointments.

The Federal Reserve acts independently of government, with pretty much only these appointments, each a 14 year term, and confirmation of each governor by the Senate.

fed reserve org. chart

Considering we cannot find out which institutions received Federal money or where the $12.82 trillion dollars of Federal Reserve financial commitments are, isn't this making the Democratic aspects of financial regulation even worse?

During the Bush administration we had then Treasury Secretary Hank Paulson, acting as CEO in Chief, strong arming banks and even Congress into passage and use of the TARP. No other ideas were seriously considered and Congress simply handed over the cash with a lot of scare tactic rhetoric.

CAPITALISM, FREEDOM OR LIBERTY ?

Capitalism is based on competition of a variety of competitors, without competition there is no free market, but only a market for the too big to fail, without real competition capitalism is a combination of firms allied in monopoly to exterminate competition and control prices a trust that controls the liberty of the market, that shackles the rights of consumers, and holds the economy hostage to ransom by the self called best and brightest that crashed the system.

Let us not confuse liberty with freedom or worse with libertine license to satisfy our whim and abuse the rights of the rest. Liberty is the result of Justice protecting the weak, avoiding enslavement of the most vulnerable, shaking the yoke of servitude, on the other hand freedom is the total absence of restraint or lack of restraint.