Bank of America Swindle - say Glass Steagall as an answer

Discussion in 'Politics' started by hvactec, Oct 29, 2011.

  1. hvactec

    hvactec VIP Member

    Jan 17, 2010
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    New Jersey
    ince the revelation one week ago that Bank of America--with Federal Reserve approval--moved a $22 trillion book of derivatives from its downgraded Merrill Lynch securities unit to its Federally insured retail bank, the principle of the Glass-Steagall Act has fairly cried out to be enforced against this open swindle.

    BoA is in trouble, and in its default or failure, this derivatives book now gets privileged treatment in bankruptcy, and would be subject to Federal Deposit Insurance Corporation insurance!

    The potentially huge bailout swindle has provoked outrage, including in Congress.

    The FDIC opposed it, but Ben Bernanke's Federal Reserve and Tim Geithner's Treasury gave the okay.

    An Oct. 27 Bloomberg News article, which includes a link to the Kaptur-Jones H.R. 1489 bill to restore Glass-Steagall, reported on letters sent to all the chief banking regulators by Rep. Brad Miller (D-N.C.) and seven other Representatives, and by Sen. Sherrod Brown (D-Ohio) and nine other Senators, protesting their allowing this transfer.

    Brown's letter said: "This provides an additional safety net subsidy for one of the biggest derivatives dealers, that is contrary to not only the principles, and potentially the strictures, of the Dodd-Frank Act, but also the original intent of the Federal Reserve Act and the Federal Deposit Insurance Act."

    Senator Bernie Sanders, a Vermont Independent who supported legislation to separate trading operations from commercial banking, is quoted that the transaction is "a perfect example why we should break up too-big-to-fail financial behemoths."

    And after quoting Rep. Maurice Hinchey (D-N.Y.), the Bloomberg article notes, "Hinchey is among more than 40 House lawmakers who have signed on to a bill that would reinstate the Glass-Steagall Act. [Here the article links to H.R. 1489 on]

    The opening of Senator Brown's letter makes the following point: "The primary purposes of section 23A [of the Federal Reserve Act] are protecting Federally insured banks from riskier activities conducted by nonbank affiliates, and {preventing nonbank affiliates from benefitting from the subsidies provided by the federal safety net}." No bailouts!

    READ MORE Bank of America Swindle - say Glass Steagall as an answer | NowPublic News Coverage

  2. georgephillip

    georgephillip Gold Member Supporting Member

    Dec 27, 2009
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    Los Angeles, California
    European banks may be about to experience a delayed reaction to Wall Street's 2008 looting. The Street claims it isn't worried because these assets are insured. (like AIG?) Investors don't seem convinced since they've hammered Morgan Stanley and other big US banks in the last week.

    Robert Reich joked in a recent column about Obama calling for the resurrection of Glass-Steagall.
    Maybe by this time next year Wall Street won't be laughing anymore.

    Robert Reich

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