Posted on 07/24/2015 4:45:57 AM PDT by expat_panama
Five years after the passage of the Dodd-Frank financial law, the causes and effects of the failed economic recovery are apparent throughout the banking system. The Federal Reserve’s monetary easing has inflated bank reserves, but lending has barely increased. Today banks maintain an extraordinary $29 of reserves for every dollar they are required to hold. In the first quarter of 2015 banks actually deposited more money in the Fed ($65.1 billion) than they lent ($52.5 billion).
According to the Federal Deposit Insurance Corp., 1,341 commercial banks have disappeared since 2010. Remarkably, only two new banks have been chartered. By comparison, in the quarter century before the financial crisis, roughly 2,500 new banks were chartered. Even during the Great Depression of the 1930s, an average of 19 new banks a year were chartered.
A Mercatus Center survey found that while community banks have hired 50% more compliance officers to deal with Dodd-Frank, overall industry employment has increased only 5% and remains below precrisis levels. Industrial, consumer and mortgage finance continue to flee the banking system, as the American Bankers Association reported this week that the law’s regulatory burden has led almost half of banks to reduce offerings of financial products and services.
New financial-services technology, such as online and mobile payment systems, has continued to blossom, but almost exclusively outside the banking system. The massive resources of, and talent in, banks have been sidetracked, rather than being employed to make loans and boost the economy.
Worst of all...
[snip]
Most criticism of Dodd-Frank focuses on its massive regulatory burden, but its most costly and dangerous effects are the uncertainty and arbitrary power it has created by the destruction of the rule of law. This shackles economic growth but more important, it imperils our freedom.
(Excerpt) Read more at wsj.com ...
Moral of the story. Banks are saying “If we can’t do business the way we want, laws and consumer protection be damned, we’ll just take are ball and go home.” Sad.
It should be clear that whatever the federal government touches, it destroys.
What with the circus in the nation's capitol, there is probably no going back.
Yikes!
As gold'n'siilver continue their freefall (now at $1,080.63 and $14.52) the S&P reached back to it's 50-day moving average and raised its distribution count to 7 Right now futures traders are seeing more falling metals -0.93% but some bargain hunting in stocks +0.21%. Only majore report: 10:00 AM New Home Sales.
How about more like "if you make loaning money illegal then we'll obey the law and not make loans" --and the American people get what they voted for.
Blue...you missed it.....panama nailed it.
The massive data base collected on every American by this out of control government is being used against Americans and anyone who does not believe this socialist administration does not have something on every US congressmen, supreme court members, and US house and is being used to extort them into compliance, is completely delusional! Personally, I don't do business with the government (banks) and I use private money orders to pay my bills. No business with banks period!
Things are looking up. Amazon finally showed a profit.
Not only that, they’re bigger than Wallmart now! Ooops, don’t tell the left...
On the flip side, I’ve had a local bank tell me
“given your history and credit worthiness, we’d love to give you a loan on that rental property, but Dodd-Frank won’t allow it.”
Twenty five years ago you could get a loan with just a few pages of forms. It’s a small phone book now. Dodd-Frank fixed nothing. Too-Big-To-Fail banks still exist and those pressures are worse than ever. Create some clear, objective rules and live by them. What we have now is executive whim and that’s essentially a tyranny.
Imagine returning to the regulatory regime that existed at the beginning of the GWB administration. The economy is set to grow big time under the next administration. If it’s the right one.
“Imagine returning to the regulatory regime that existed at the beginning of the GWB administration. The economy is set to grow big time under the next administration. If it’s the right one.”
That's that leftist party line but there are very little observable factors that point to a collapse in general prices being caused by not enough gov't interference. Things like banks forced to make dodgy loans to minorities however can easily traced to coercion began a decade earlier.
free-marketeers and government hop into bed together
imho the very purpose of government is to serve the people whom they govern in order to defend their rights to pursue stuff like life and liberty. There's neither life nor liberty if free people can't feed their families by buying and selling in market all the wealth they create.
Banks were more than happy to issue those loans, take their fees, and then bundle them up and sell them off to investors, lying about the risk.
Which are you, Bluewater2015?
Things like banks forced to make dodgy loans to minorities however can easily traced to coercion began a decade earlier.
Banks were more than happy to issue those loans, take their fees, and then bundle them up and sell them off to investors, lying about the risk.
Not gonna happen. What we're looking at is good ol' fashioned mindless class hatred. Reality is that producing virtually any good or service requires both labor and capital, but leftists can't seem to put aside the mistaken belief that somehow labor is good and capital is evil.
Interesting factoid: there are more Americans participating in the capital markets than participate in the labor market --based on the fact that there are more Americans who own stocks/stockfunds than there are employees.
Imagine a carpenter without a hammer and nails (aka capital).
Are banks profit oriented? Yes. Does government create perverse incentives? Yes.
You have to understand, Blue and Bubba, that economics happens at the margins. A single marginal shift pulls the market that way. Just a small change in lending practices creates a winner take all effect that forces competitors to follow suit.
Now in a free market that leads to innovation, change, destruction/creation and improvement sustained over time. In a centrally planned market or one dictated to by bureaucrats you get a political solution that leads to skewed results, losses being borne by the public, and profits going to cronies.
Bluewater’s very liberal response is a call for more better regulation. It’s a tell that separates liberals from conservatives. Mark BW2015. He’s a liberal and perhaps a troll.
Your response was kinder than mine, what went on w/ me was that all too often people separate into groups of those like us who do things, and others who complain. Sure, mere complaining shouldn’t be a problem but beside the irritation factor there’s always the danger that complaints evolve into attacks.
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