Courtesy of Pam Martens.
The U.S. House of Representatives’ Financial Services Committee will convene at 10 a.m. this morning to hear new warnings about the growing dangers posed by the too big to fail Wall Street banks.
On deck to testify are: Thomas Hoenig, Vice Chairman of the Federal Deposit Insurance Corporation (FDIC); Richard W. Fisher, President of the Federal Reserve Bank of Dallas; Jeffrey Lacker, President of the Federal Reserve Bank of Richmond; and Sheila Bair, former Chair of the FDIC, now with the Pew Charitable Trust. (Bair wrote the quintessential insider’s account of the 2008 crash, Bull by the Horns.)
Tragically, these individuals spent hours writing their testimony with the full knowledge that it will far on the deaf ears of a Congress that is incapable of seeing a train wreck coming down the tracks until the mangled cars lie scattered over the landscape.
Here’s a look at some interesting milestones leading up to this hearing:
May 2011: Restructuring the Banking System to Improve Safety and Soundness, By Thomas M. Hoenig, President and CEO, Federal Reserve Bank of Kansas City, and Charles S. Morris, Vice President and Economist, Federal Reserve Bank of Kansas City
“This proposal to reduce costs and risks to the safety net and financial system has two parts. The first part proposes to restrict bank activities to the core activities of making loans and taking deposits and to other activities that do not significantly impede the market, bank management, and regulators in assessing, monitoring, and/or controlling bank risk taking. However, prohibiting banks from engaging in activities that do not meet these criteria and that threaten financial stability would provide limited benefits if those activities migrate to shadow banks. The second part proposes changes to the shadow banking system by making recommendations to reform money market funds and the repo market.”
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