Banks ‘Too Big to Fail’ Have Grown Even Bigger
When the credit crisis struck last year, federal regulators pumped tens of billions of dollars into the nation’s leading financial institutions because the
Today, the biggest of those banks are even bigger.
The crisis may be turning out very well for many of the behemoths that dominate U.S. finance. A series of federally arranged mergers safely landed troubled banks on the decks of more stable firms. And it allowed the survivors to emerge from the turmoil with strengthened market positions, giving them even greater control over consumer lending and more potential to profit.
J.P. Morgan Chase, an amalgam of some of Wall
Now that’s a sweet deal – boost your market share in originating what are essentially "no-risk" loans because, either wards of the state Fannie Mae and FreddieMac will buy the loans or you’ll get bailed out if things again go awry.
If you’re a big bank, what’s not to like about that?
It seems that the lines between the U.S. Government, the Federal Reserve, and the nation’s largest banks are becoming even more irreparably blurred.
A year after the near-collapse of the financial system last September, the federal response has redefined how Americans get mortgages, student loans and other kinds of credit and has made a national spectacle of executive pay. But no consequence of the crisis alarms top regulators more than having banks that were already
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
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