Oct. 15 (Bloomberg) -- U.S. regulators should consider breaking up large financial institutions considered “too big to fail,” former Federal Reserve Chairman Alan Greenspan said. Those banks have an implicit subsidy allowing them to borrow at lower cost because lenders believe the government will always step in to guarantee their obligations. That squeezes out competition and creates a danger to... [more]
Oct. 15 (Bloomberg) -- U.S. regulators should consider breaking up large financial institutions considered “too big to fail,” former Federal Reserve Chairman Alan Greenspan said.
Those banks have an implicit subsidy allowing them to borrow at lower cost because lenders believe the government will always step in to guarantee their obligations. That squeezes out competition and creates a danger to the financial system, Greenspan told the Council on Foreign Relations in New York.
“If they’re too big to fail, they’re too big,” Greenspan said today. “In 1911 we broke up Standard Oil -- so what happened? The individual parts became more valuable than the whole. Maybe that’s what we need to do.”
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aJ8HPmNUfchg[less]
Response by sidelinesitter
almost 16 years ago
Posts: 1596
Member since: Mar 2009
RS - I don't think Greenspan is having flashbacks. I think it's actually hallucinations.
I don't know if it's merely comical or more like sickening that old ali g, the central bankster, has a platform like the Council on Foreign Relations (and Bloomberg reporting) to criticize his successors for following the playbook that he basically wrote. This speech was just a pathetic attempt to disown his policy offspring and stick a finger in the leaking dike that is his reputation/legacy. Some choice tidbits:
“At one point, no bank was considered too big to fail, Greenspan said. That changed after the Treasury Department under then-Secretary Hank Paulson effectively nationalized Fannie Mae and Freddie Mac, and the Treasury and Fed bailed out Bear Stearns Cos. and American International Group Inc.
“It’s going to be very difficult to repair their credibility on that because when push came to shove, they didn’t stand up,” Greenspan said.”
Oh really? Does he really expect us to believe that he was the bad-ass regulator who wouldn’t take any of this ‘too big to fail’ crap from banks? I mean, the man thought that hedge funds were too big to fail (see LTCM), let alone banks. I call BS on the ‘when I was in charge we stood up to banks’ implication.
““Failure is an integral part, a necessary part of a market system,” he said. “If you start focusing on those who should be shrinking, it undermines growing standards of living and can even bring them down.”
Let us pause here to recall the gross misallocation of capital to residential housing that occurred after the tech bubble burst and the Greenspan Fed stepped on the gas to inflate asset prices and prevent exactly the type of failure that he contends is necessary in a market system. How’s that working out for standards of living, Al?
A quick poll: which of Greenspan, Rubin and Summers has suffered the least damage to his reputation since the Time cover in 1999? I think you have to give it to Summers, although not for lack of effort.
Ignored comment.
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Response by Truth
almost 16 years ago
Posts: 5641
Member since: Dec 2009
sidelinesitter: Summers.
Ignored comment.
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Response by truthskr10
almost 16 years ago
Posts: 4088
Member since: Jul 2009
My favorite line of nostalgia
"It's not smooth sailing," Lehman's chief financial officer, Christopher O'Meara, said, "but the worst of this credit correction is behind us."
Sept 2007
RS - I don't think Greenspan is having flashbacks. I think it's actually hallucinations.
I don't know if it's merely comical or more like sickening that old ali g, the central bankster, has a platform like the Council on Foreign Relations (and Bloomberg reporting) to criticize his successors for following the playbook that he basically wrote. This speech was just a pathetic attempt to disown his policy offspring and stick a finger in the leaking dike that is his reputation/legacy. Some choice tidbits:
“At one point, no bank was considered too big to fail, Greenspan said. That changed after the Treasury Department under then-Secretary Hank Paulson effectively nationalized Fannie Mae and Freddie Mac, and the Treasury and Fed bailed out Bear Stearns Cos. and American International Group Inc.
“It’s going to be very difficult to repair their credibility on that because when push came to shove, they didn’t stand up,” Greenspan said.”
Oh really? Does he really expect us to believe that he was the bad-ass regulator who wouldn’t take any of this ‘too big to fail’ crap from banks? I mean, the man thought that hedge funds were too big to fail (see LTCM), let alone banks. I call BS on the ‘when I was in charge we stood up to banks’ implication.
““Failure is an integral part, a necessary part of a market system,” he said. “If you start focusing on those who should be shrinking, it undermines growing standards of living and can even bring them down.”
Let us pause here to recall the gross misallocation of capital to residential housing that occurred after the tech bubble burst and the Greenspan Fed stepped on the gas to inflate asset prices and prevent exactly the type of failure that he contends is necessary in a market system. How’s that working out for standards of living, Al?
What a clown.
Hey, here's a flashback:
http://www.time.com/time/covers/0,16641,19990215,00.html
Wipe those damn smiles off your faces, you hacks.
malthus - priceless!
A quick poll: which of Greenspan, Rubin and Summers has suffered the least damage to his reputation since the Time cover in 1999? I think you have to give it to Summers, although not for lack of effort.
sidelinesitter: Summers.
My favorite line of nostalgia
"It's not smooth sailing," Lehman's chief financial officer, Christopher O'Meara, said, "but the worst of this credit correction is behind us."
Sept 2007
http://streeteasy.com/nyc/talk/discussion/2332-wall-street-bonuses-on-or-above-target-for-2007
So said the guy who lept off the building with one floor left to go.
O'Meara's theme song:
"I am sailing,
I am sailing
home again across the sea
I am sailing,
stormy waters
to be with you to be free..." ("Sailing", Rod Stewart )
sidelinesitter:
neologism of the day: Greenbackcinations.
The real criminal.
http://www.youtube.com/watch?v=y3WdYXLe3R8
"The real criminal.
http://www.youtube.com/watch?v=y3WdYXLe3R8 "
OUCH LOL!
.....Barney Fife/Frank is one of those few that if I had encountered "in person" would be very difficult for me not to just punch him in the face.
".....Barney Fife/Frank is one of those few that if I had encountered "in person" would be very difficult for me not to just punch him in the face.' "
agreed.