Even more exciting up-and-coming financial regulation: Big banks now required to produce emergency plans
posted at 4:41 pm on August 10, 2012 by Erika Johnsen
Blergh. It appears that federal regulators have recently required that the five largest American banks — Bank of America, Goldman Sachs, Citigroup, Morgan Stanley, and JPMorgan Chase — need to come up with “recovery plans” in the event of fiscal calamity, and the plans should be careful not to rely on public-sector help. …Gee, ya’ think? Riddle me this, dear regulators: How did we get in this “too big to fail” situation in which banks might reasonably expect federal assistance in the first place? It couldn’t have been because of — oh, I don’t know — too much government interference in the private sector, could it?
The two-year-old program, which has been largely secret until now, is in addition to the “living wills” the banks crafted to help regulators dismantle them if they actually do fail. It shows how hard regulators are working to ensure that banks have plans for worst-case scenarios and can act rationally in times of distress.
Officials like Lehman Brothers former Chief Executive Dick Fuld have been criticized for having been too hesitant to take bold steps to solve their banks’ problems during the financial crisis.
According to documents obtained by Reuters, the Federal Reserve and the U.S. Office of the Comptroller of the Currency first directed five banks… to come up with these “recovery plans” in May 2010.
They told banks to consider drastic efforts to prevent failure in times of distress, including selling off businesses, finding other funding sources if regular borrowing markets shut them out, and reducing risk. The plans must be feasible to execute within three to six months, and banks were to “make no assumption of extraordinary support from the public sector,” according to the documents. …
Recovery plans differ from living wills, also known as “resolution plans,” which are required under the 2010 Dodd-Frank financial reform law. Living wills aim to end bailouts of too-big-to-fail banks by showing how they would liquidate themselves without imperiling the financial system.
Yes, because we should never expect private, profit-seeking ventures to act rationally, should we? It’s completely the government’s fault if they’ve altered banks’ preferred course from agile and responsive profit-seeking to clunky and entrenched rent-seeking. But hey, I guess we should give the feds a break — even if they have no possible way of foreseeing the long-term effects of their incredibly dumb and growth-hindering regulations, they at least have the best of intentions, right? They’re from the government, and they’re here to help! The White House couldn’t possibly be capable of corruption, cronyism, playing politics, or doing whatever they darn well please, the costs be damned. They’re just looking out for us is all.
…Just kidding, but isn’t it pretty to think so?
The Justice Department said Thursday it won’t prosecute Wall Street firm Goldman Sachs or its employees in a financial fraud probe.
In a written statement, the department said it conducted an exhaustive investigation of allegations brought to light by a Senate panel investigating the 2008-2009 financial crisis.
“The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time,” the department said. …
The Justice Department’s decision capped a good day for Goldman as the Securities and Exchange Commission decided not to file charges against the firm over a $1.3 billion subprime mortgage portfolio. At the same time, the Justice Department’s decision ensured that the Obama administration will continue to feel political heat, particularly from the liberal wing of the president’s own party, for not having brought more prosecutions in the financial crisis.
Wait a moment… somebody remind me why banks like Goldman thought it would be a good idea to get into the business of making subprime loans again?
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Only solution to this for Dems and RINOs, for tax ‘expenditures’ –
Tax Ireland!
Liam on May 21, 2013 at 8:03 PM
Shouldn’t O’bama be able to talk to some of his relatives over there and sort things out?
rightmind on May 21, 2013 at 8:09 PM
That is called “competition’. Something Obama understands about as well as he spells or pronounces common words.
pat on May 21, 2013 at 8:10 PM
Abolish the corporate tax. It isn’t even close to being worth having. Just make dividends part of income.
Count to 10 on May 21, 2013 at 8:11 PM
Don’t touch the Guinness…
d1carter on May 21, 2013 at 8:11 PM
Tax it like hell!
It’s costing American liberals spending money.
What are you — anti-American?
I bet you’d shoot a guy you might catch raping a woman, without knowing his circumstances and how he feels.
Liam on May 21, 2013 at 8:15 PM
Since some of my companies do business offshore, I am as guilty as Apple, albeit on a comparatively infinitesimal scale, in setting up Irish holding companies that place company funds in American banks and other American-based financial vehicles. All perfectly legal.
Why, because I don’t wish to pay a single penny more in taxes, no matter to which government that’s involved. Why does Apple do it or, for that matter, any other huge publicly traded entity do it? Well, if they didn’t, they’d be open to shareholder suits for “wasting corporate assets” or shareholder “Change of Management” proxy fights at their next annual meeting, which would be prosecuted by some multi-billion dollar investment fund holders.
A publicly held company has a lot more scrutiny, due to its board’s fiduciary duty to shareholders, than does a simple, greedy bastard like me.
TXUS on May 21, 2013 at 8:18 PM
lol, He was just socially awkward and didn’t know how to ask politely.
arnold ziffel on May 21, 2013 at 8:19 PM
I hope you get filthy rich.
And never hire liberals.
Liam on May 21, 2013 at 8:19 PM
I love to mention this sort of stuff to my Apple using lib friends.
How Apple uses foreign labor (toss in exploit for extra effect) and minimizes their tax exposure thru perfectly legal means.
Fun to watch them squirm.
Hill60 on May 21, 2013 at 8:20 PM
Ban St Patrick’s Day parades !!
burrata on May 21, 2013 at 8:20 PM
Kill a rapist, offend a liberal.
Liam on May 21, 2013 at 8:21 PM
No! We can’t do THAT!
Tax it instead! See — a level playing field.
Liam on May 21, 2013 at 8:23 PM
If following the law to avoid paying taxes is wrong, can we impeach Obama on the fact that he claimed deductions on his 1040?
malclave on May 21, 2013 at 8:27 PM
That’s funny. When Clinton made one of his returns public years ago, he wrote off his used undershorts at $2.50 each.
I don’t file a long form any more. But when I did, I never claimed my charitable donations. What I return to God does not leave me room to try getting back a piece of it.
Liam on May 21, 2013 at 8:31 PM
I’d like to travel back into the past and bitchslap everyone involved in setting up LoN/UN
dmacleo on May 21, 2013 at 8:33 PM
Well, when your choice is paying the Irish 12.5% on offshore earnings vs. the IRS’s 35% on same, almost three times as much, this Texan’s ready to share a pint and a “top ‘o the mornin’ to ye.”
TXUS on May 21, 2013 at 8:33 PM
Great !
Now let them try to tax Cinco de Mayo parade ,
you know for a level playing field !!
burrata on May 21, 2013 at 8:33 PM
Long as ye buy the first pint, we celebrate!
Liam on May 21, 2013 at 8:35 PM
That would be racist, man. What is wrong with you?
The Irish aren’t a minority.
Why do I hang out with you people? /
Liam on May 21, 2013 at 8:37 PM
Nigh a problem, William. I’ll buy the pints, you bring the lassies.
TXUS on May 21, 2013 at 8:47 PM
Deal!
I have a thing for redheads. That okay there?
Liam on May 21, 2013 at 8:49 PM
Éirinn go Brách (or for my English friends, Erin go Bragh)
IrishEyes on May 21, 2013 at 8:52 PM
From an American of Scot lineage: Ciamar a tha thu?
Liam on May 21, 2013 at 8:55 PM
Tax Bono.
Ronnie on May 21, 2013 at 8:55 PM
That’s one way of looking at it, the other way of looking at it, is that by claiming the deduction, it provides more to give. i.e, if you are in the 28% bracket, if you don’t take the deduction, for every dollar you donate, you have to earn $1.39.
AZfederalist on May 21, 2013 at 8:57 PM
+1000
Out his a$$!
He’s nothing but an international panhandler in a Bond Street suit.
Liam on May 21, 2013 at 8:58 PM
I’m no longer in position to itemize. But I have a personal religious view. I worked from there.
Liam on May 21, 2013 at 9:01 PM
I do, too. If I get $100 bill from a bank (I hate $100 bills) I put it in the first charity box I see, wrapped in a $1. We’re not rich, rich. We just have a little breathing room. My philosophy is good deeds don’t count if you tell someone or claim it as a deduction. My accountant hates me… lol.
Fallon on May 21, 2013 at 9:06 PM
I’m of the view, as according to Scripture, that for what we do in private with the Lord, He will reward us openly.
I believe as you do.
Liam on May 21, 2013 at 9:10 PM
Everybody needs to do what their conscience tells them. I think where one would get off track is if one were to give because it is tax deducttible.
AZfederalist on May 21, 2013 at 9:10 PM
… as far as giving without publicizing it; up until this week, I was under the impression that my charitable donations were completely private and that the IRS would keep those records private.
AZfederalist on May 21, 2013 at 9:13 PM
THAT describes a liberal.
Liam on May 21, 2013 at 9:13 PM
Think about it — Bill Clinton deducted from his $2.50 a pair for his ‘donated undershorts, and we’re expected to think he’s somehow a ‘nice guy’?
Liam on May 21, 2013 at 9:18 PM
I’m in a bad mood all day.
Give me a troll to chew on.
Liam on May 21, 2013 at 9:21 PM
We do a lot of things wrong in Ireland
but the corporate tax rate was one of the things we did right
now the eurocrats want to take it away
breffnian on May 21, 2013 at 9:29 PM
Apple: “Hey Ireland how about a low tax rate?”
Ireland: Brilliant!
Apple: Brilliant!
BKennedy on May 21, 2013 at 9:56 PM
Good. That’s my only problem with Apple doing this; that they are a bunch of hypocritical progs.
As to declaring taxes, I’ve considered the doing in private aspect, and really respect those who chose that route, but when I consider all the pure evil the government does with my tax dollar, I chose to keep as much out of their wicked hands as legally possible. I still fear it won’t be enough to wash me of the guilt I have in continuing to fund that evil.
pannw on May 21, 2013 at 10:31 PM
The proggie lib hears only “misses out on … tax revenue” and says, “That’s not fair! You’re not paying your fair share!”
When asked about the jobs, the proggie lib responds indignantly, “Well, since you won’t give EVERYONE a well-paying programmer or executive job, then THAT’S NOT FAIR either!”
When told life isn’t fair, the proggie lib snarls, “Once the government controls everything, IT WILL BE!”
Marcola on May 22, 2013 at 12:26 AM
Letting too many snakes onto the Emerald Isle in P.C. stupidity.
O’Sharia.
profitsbeard on May 22, 2013 at 3:49 AM
Say there wasn’t anyone on that panel that has a rich heiress wife that shelters her NINE-figure fortune in a Trust, is there?
Cough-Cindy-Cough-McCain…
Tekov Yahoser on May 22, 2013 at 4:57 AM
I guess the Senate Democrats figured they’d found a pot o’ gold.
Odysseus on May 22, 2013 at 7:27 AM
The nerve of those Irish.
Not taxing everyone that wants to do business in their country over 50%. To not support their ruling elite with well earned compensation and benefits such as “seperate but equal” healthcare, pensions/social security, immunity from tax and regulations as well as most non felonious law.
They are obviously infidels and heathens unworthy of our fearless leaders support.
acyl72 on May 22, 2013 at 7:31 AM