The goal of the Volcker Rule, which became law under the Dodd-Frank Act was to restrict speculative trading activity in risky derivatives by the Too Big To Fail Banks. The ban on proprietary bank trading was proposed by former Federal Reserve Chairman Paul Volcker who believed that one of the primary causes of the 2008 financial meltdown was a result of speculative trading activity [...]
The Federal Reserve Bank of Dallas joined the growing chorus of critics who maintain that the Dodd-Frank Act will not prevent future taxpayer funded bank bailouts. The Dallas Fed said taxpayers are still at risk for the cost of large banks failures and that any future bailouts should result in severe consequences for both bank management and bank creditors. According to Bloomberg,
The [...]
Posted on April 27, 2012 ·
Maryland state regulators closed the Bank of the Eastern Shore, Cambridge, MD and the FDIC was appointed as receiver. As has happened on previous occasions, the FDIC was unable to find a buyer for the failed bank, leaving uninsured depositors at risk of loss on their savings.
To protect insured depositors and wind down the operations of failed Bank of the Eastern Shore, the FDIC [...]
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problem banks Posted on April 19, 2012 ·
Has the exponential increase in lending regulations since 2008 contributed to the worst economic decline since the Depression of the 1930′s? Government “solutions” to problems have a long history of failure. In addition, the unanticipated consequences of government “solutions” often result in a plethora of new problems worse than the original ones [...]
Posted on February 24, 2012 ·
How does the average consumer get by without a basic checking account? How does someone without a checking account pay the bills that arrive each month – drive around to each creditor and pay in cash? Where do you keep your savings – under the mattress or buried in the back yard?
As incredible as it may seem, millions of Americans have neither savings or checking [...]
Posted on January 4, 2012 ·
Welcome to Banking Update, a roundup of articles and news from around the Internet. Banks continue to be sued for selling defective mortgages, the Fed says a housing recovery is essential for economic recovery, Americans still believe owning a home is part of the “American dream”, banks are still engaged in risky behavior, savings rates are negative, European banks [...]
Posted on October 20, 2011 ·
Potential losses on Bank of America’s massive $75 trillion book of risky derivative contracts has just been dumped onto the FDIC by the Federal Reserve.
Derivatives, once described by Warren Buffet as “financial weapons of mass destruction” are complex contracts entered into for speculation or to hedge risks linked to a wide variety of other (derivative) financial [...]
Posted on September 9, 2011 ·
With the European banking system tottering on the brink of collapse, nervous holders of cash have flooded the U.S. banking system with $1.2 trillion of deposits. Panicky holders of large amounts of cash are taking advantage of a provision of the Dodd-Frank Act that provides unlimited FDIC insurance coverage on noninterest-bearing transaction accounts.
The Dodd-Frank Act provides [...]
Posted on October 21, 2010 ·
October 19, 2010 – The FDIC announced today a long term Restoration Plan to return the Deposit Insurance Fund (DIF) to a positive balance. The long term goal of the proposed fund management plan is to maintain a positive fund balance, even “during periods of large fund losses, and maintaining steady, predictable assessment rates throughout economic and credit [...]
Posted on October 7, 2010 ·
October 6, 2010 – The International Monetary Fund warned of elevated risks to global economies, real estate and the banking sector in its latest World Economic and Financial Survey.
The IMF’s pessimistic outlook for economic recovery zeroed in on the risks associated with excessive levels of sovereign, commercial and household debt in an environment of slowing economic [...]