Free Republic

In an otherwise sensible economic debate last week, all the Republican candidates flunked the stress test on bank bailouts. Instead of pledging to end bailouts forever, they said they might do it all over again. This a big problem for the party, because the 2008 taxpayer rescue of the big banks, AIG and investment houses continues to cast a long shadow. Americans still think of the GOP as the party of corporate bailouts. Here's how John Kasich put it: "When a bank is ready to go under, and depositors are getting ready to lose their life savings, you just don't...

At the Republican Presidential debate earlier this week, Texas Senator Ted Cruz did something unusual for a politician -- he gave a straightforward answer to a question. Yes, Cruz made clear, if the Bank of America was on the brink, he would let it fail. That answer made perfect sense to millions of Americans who are tired of politicians doing special favors for their well-connected friends on Wall Street. But doing such favors is what Washington politics is all about. That reality was highlighted by Neil Barofsky, who served as the Special Inspector General for the TARP bailouts. His book...

As central planners the world over grapple with the effective "lower bound" that's imposed by the existence of physical banknotes, there’s been no shortage of calls for a ban on cash. Put simply, if you eliminate physical currency, you also eliminate the idea of a floor for depo rates. After all, if people can't withdraw paper money and stash it under the mattress, then interest rates can be as negative as the government wants them to be in order to "encourage" consumption. If, for instance, you’re being charged 10% for saving your money, then by God you will probably spend...

Protesters hijack Monday Night Football: Two men abseil from the stands and dangle unhindered for TWO QUARTERS as Colts play Panthers - but how did they get rappelling gear past security? Two protesters rappelled down from the upper balcony to unfurl a banner protesting against Bank of America during Monday night's game between the Indianapolis Colts and the Carolina Panthers. The protesters dangled over fans in the lower bowl and in front of press-box windows in Bank of America Stadium in Charlotte, North Carolina, late in the third quarter, then displayed a banner telling the Charlotte-based financial institution to 'dump...

The largest United States banks would face a US$120 billion (S$168 billion) total shortfall of long-term debt under a Federal Reserve proposal aimed at ensuring their failure would not hurt the broader financial system. The rule on total loss-absorbing capacity, or TLAC, is a key part of regulators' efforts to avoid another financial crisis. If US banks were to fail, investors in their stock would lose everything, but the debt would be converted into equity in a new, reconstituted bank under the plan.

Democratic presidential front-runner Hillary Clinton on Tuesday said she would be willing to let big banks fail — a break from what President Obama did in 2009, according to CNN. Appearing on “The Late Show with Stephen Colbert,” Clinton was asked by Colbert, “If you're president and the banks are failing, do we let them fail?” Her response was clear: “Yes, yes, yes, yes, yes, yes, yes.” “First of all, under Dodd-Frank, that is what will happen because we now have stress tests and I'm going to impose a risk fee on the big bank if they engage in risky...

Only weeks after the White House made headlines with a directive urging prosecutors to get tougher on corporate crime, the Obama administration has moved to protect a convicted financial firm from punishment. The bank, Credit Suisse, has donated hundreds of thousands of dollars to President Barack Obama’s political campaigns. It also employs the Podesta Group, a lobbying firm with family connections to the Obama administration and Hillary Clinton’s 2016 campaign. In 2014, Credit Suisse pleaded guilty to criminal charges for operating “an illegal cross-border banking business that knowingly and willfully aided and assisted thousands of U.S. clients in opening and...

The concept of earning interest on money in the bank is so deeply ingrained into economic life that few people even know that the opposite can happen too: Banks can take a percentage of cash from your account in the form of negative interest rates, under certain conditions. Normally, this doesn't happen. Banks want your cash, and pay you interest on it, because the more deposits they have, the more they can lend it to others who pay them even more on their investments. But interest rates in Europe are so close to zero — and economic activity is so...

Global law enforcement agencies have arrested a gang member behind the theft of £20 million ($30.7 million) via a piece of malicious software that records banking details, and are on the hunt for the remaining members. The malware – known as Dridex – is believed to be developed by in eastern Europe and it's able to harvest bank details online in order to steal money from people. Global financial institutions and a variety of different payment systems have been targeted, the U.K.'s National Crime Agency (NCA), one of the authorities involved, said on Tuesday. "Thousands" of Brits have been infected...

Cheap oil is creating headaches for the Wall Street firms that bankrolled America's oil boom. That's because the crash in oil prices is putting energy companies under financial stress. Oil revenue has dried up, yet these companies are still saddled with tons of debt. America's largest banks are now raising red flags about the health of those loans. For the second-straight quarter, the banks have warned investors about an uptick in troubled energy loans. Banks "are going to lose money on the loans they've made. That's pretty evident -- whether oil prices go to $30 or $80 a barrel," said...

Taking on a new case that tests Congress’s power over the courts, but also gets into a sensitive question of U.S.-Iran dealings, the Supreme Court agreed on Thursday to review a legislative mandate on legal rights at issue in a case filed by victims of terrorism. The case filed by Iran’s central bank, Bank Markazi v. Peterson, was one of thirteen new cases that the Justices accepted for review in the new Term that formally opens next Monday. It is likely that the Court will hear oral arguments in the new cases in January and February.

With countless settlements documenting the rigging of every single asset class, it was only a matter of time before the regulators - some 10 years behind the curve as usual - finally cracked down on gold manipulation as well, even though as we have shown in the past, central banks in general and the Fed in particular are among the biggest gold manipulators. That said, we are confident by now nobody will be surprised that there was manipulation going on in the gold casino. In fact, ever since Germany's Bafin launched a probe into Deutsche Bank for gold and silver...

S&P Says China’s Banks Face Growing Risk From Bad Debt Problems in the real-estate sector are also a factor as ratings firm revises assessment to negative from stable By Mark Magnier Sept. 21, 2015 8:18 a.m. ET 0 COMMENTS BEIJING—In the latest sign of headwinds hitting the Chinese economy, a U.S. credit-rating firm said China’s banks face growing risk tied to rising bad loans and problems in its real-estate sector. Standard & Poor’s Ratings Services said Monday it had revised to negative from stable its assessment of the economic risks facing China’s banking industry, one of Beijing’s major levers as...

While the world breathlessly awaits the outcome of this week’s FOMC meeting—will the Federal Reserve raise interest rates or won’t it?—one thing is clear regardless: the Fed is driving the U.S. into a 2nd depression in order to carry out its one and only remit now that America’s ability to produce real jobs has been reduced to ash, namely, propping up criminal banks with multi-trillion-dollar giveaways. What’s so disturbing about the fatal path that the Fed has been on for 7 years is that it's one the Fed went down before, when—by its own admission—it extended and deepened the Great...

“Let me assure you, if the revenue environment weakens or interest-rate structures don’t move up, and the economy slows down, we’ll have to take out more costs,” Bank of America CEO Brian Moynihan said on Thursday at the Barclays Global Financial Services Conference. And that would mean more job cuts.BofA is famous for whittling down its headcount in recent years. In Moynihan’s 25-slide presentation, there was this chart that shows just how skillfully he has trimmed down his workforce, chopping it by 25% overall since the second quarter of 2011:Wolf Street So if, as he said, “interest-rate structures don’t move...

n an unusual last-minute act before the new administration takes over the reins, acting Treasury Secretary Stuart A. Levy’s former office issued a stunning report on Friday, laying out long-standing ties between Iran and the top leadership of al-Qaida. As undersecretary for terrorism and financial intelligence since that job was created in July 2004, Levy spearheaded the Treasury Department’s efforts to take the war on international terrorists to the financial battlefield, by denying individual terrorists and terrorist-support states such as Iran access to international financial markets. Less known, until last Friday, was Levy’s involvement in tracking down fugitive al-Qaida members...

For Florida taxpayers, the move by the administration of then-Gov. Jeb Bush to forge a relationship with Lehman Brothers would ultimately prove disastrous. Transactions in 2005 and 2006 put the Wall Street investment bank in charge of some $250 million worth of pension funds for Florida cops, teachers and firefighters. Lehman would capture more than $5 million in fees on these deals, while gaining additional contracts to manage another $1.2 billion of Florida’s money. Then, in the fall of 2008, Lehman collapsed into bankruptcy, leaving Florida facing up to $1 billion in losses. But for Jeb Bush personally, his enduring...

Last month I bought a house in Potomac, Md., a trade up on my current home, and was shocked to learn in the ensuing weeks that I couldn’t get a mortgage loan. First, I went to PNC bank. Then Wells Fargo. Then another. Denied. Denied. Denied. No, I don’t feel entitled to a loan, and the banks have every right not to lend me money. But my tale of woe tells a broader tale of what is going on in the lending industry these days. All the bankers told me the same thing: “Steve, if you’d walked in our bank...

Regulation: The Dodd-Frank Act's fifth anniversary this month has received surprisingly little notice. Too bad. It's a pernicious law, one that a devastating new report suggests is largely to blame for our lackluster economy. How bad is Dodd-Frank? One of its main goals, cited by both the White House and the then-Democrat-run Senate, was to get rid of the "too big to fail" doctrine that made some banks too important to allow to go bust. It sounded good at the time. But in fact, it's had the exact opposite effect, leading to a decline in small banks and rising market...

financial reform increases staffing costs. Small banks are struggling to comply with the Dodd-Frank Act, which was passed to regulate the financial industry in the wake of the 2008 financial crisis, said Rep. Scott Tipton. The Republican from Cortez received some national attention this week for challenging Federal Reserve Chairwoman Janet Yellen to support his plan to ease the burden of Dodd-Frank on small banks. ... Mike Burns, president of Alpine Bank for the Southwest region, said in a phone interview that Dodd-Frank is creating head winds. “We really want to focus our time and energy in supporting the communities...