"Here's a banking institution which most Americans never heard of, which was not designated as syste

Mar 13, 2023
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"Here's a banking institution which most Americans never heard of, which was not designated as systemically important, and over a 72-hour period, it threatens the entire financial system and financial market stability." - Roger Altman

"And the banking regulators decide to guarantee the deposit base of the entire US financial system, which is certainly what they just did." (Will this lead to less disciplined management? Will there eventually be pressure to limit shareholder returns, if you're guaranteeing the key liability of these institutions? If the taxpayer is paying to guarantee the key liability, will the taxpayer ally the shareholder to realize the benefit of that?)

"Testimony to the fragility of finance in the global digital era when individuals and institutions can move money in seconds. It's testimony to out-of-date regulation. ... This institution wasn't subject to stress tests and the tighter capital ratio, liquidity and leverage strictures which the biggest banks were subject to. It's testimony to out-of-date deposit insurance.
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<div>"Here's a banking institution which most Americans never heard of, which was not designated as systemically important, and over a 72-hour period, it threatens the entire financial system and financial market stability." - Roger Altman</div><div><br></div><div>"And the banking regulators decide to guarantee the deposit base of the entire US financial system, which is certainly what they just did." (Will this lead to less disciplined management? Will there eventually be pressure to limit shareholder returns, if you're guaranteeing the key liability of these institutions? If the taxpayer is paying to guarantee the key liability, will the taxpayer ally the shareholder to realize the benefit of that?)<br></div><div> <br></div><div>"Testimony to the fragility of finance in the global digital era when individuals and institutions can move money in seconds. It's testimony to out-of-date regulation. ... This institution wasn't subject to stress tests and the tighter capital ratio, liquidity and leverage strictures which the biggest banks were subject to. It's testimony to out-of-date deposit insurance. <br></div>
"Here's a banking institution which most Americans never heard of, which was not designated as systemically important, and over a 72-hour period, it threatens the entire financial system and financial market stability." - Roger Altman

"And the banking regulators decide to guarantee the deposit base of the entire US financial system, which is certainly what they just did." (Will this lead to less disciplined management? Will there eventually be pressure to limit shareholder returns, if you're guaranteeing the key liability of these institutions? If the taxpayer is paying to guarantee the key liability, will the taxpayer ally the shareholder to realize the benefit of that?)

"Testimony to the fragility of finance in the global digital era when individuals and institutions can move money in seconds. It's testimony to out-of-date regulation. ... This institution wasn't subject to stress tests and the tighter capital ratio, liquidity and leverage strictures which the biggest banks were subject to. It's testimony to out-of-date deposit insurance.

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