Free Republic

The questioner (Rep. Richard Shelby, R AL) just asked Mrs. Yellen if foreign banks operating in the US were held to the same capital standards as US banks. She responded [paraphrase] that "we have asked foreign banks to create holding companies in the US to contain their US operations"...Meaning that, apparently, such banks are not held to the same capitalization standards (6 years into the Great Financial Crisis) and have therefore a competitive advantage.

WASHINGTON, Sept. 10 (Xinhua) -- The U.S. Federal Deposit Insurance Corp. (FDIC) on Tuesday approved a final rule stipulating that deposits in foreign branches of American banks are not covered by the FDIC. The purpose of the rule is to ensure the U.S. will not become " a potential global deposit insurer", said FDIC in a statement. Deposits in foreign branches of U.S. banks have doubled since 2001 and total approximately one trillion U.S. dollars now, according to U.S. official data. "The final rule protects the Deposit Insurance Fund, while at the same time both the FDIC's commitment to maintaining...

Even as Greece desperately tries to avoid defaulting on its debt, American companies are preparing for what was once unthinkable: that Greece could soon be forced to leave the euro zone. Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford has configured its computer systems so they will be able to immediately handle a new Greek currency. No one knows just how broad the shock waves from a Greek exit would be, but...

Even as Greece desperately tries to avoid defaulting on its debt, American companies are preparing for what was once unthinkable: that Greece could soon be forced to leave the euro zone. Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford has configured its computer systems so they will be able to immediately handle a new Greek currency. No one knows just how broad the shock waves from a Greek exit would be, but...

The Hizbullah terrorist organization is in hot water over a scheme to launder hundreds of millions of dollars in multi-national drug trafficking revenues. According to a report published by the World News Tribune, the Lebanon-based terrorist organization is using American banks and other financial institutions to process money earned from trafficking in South America. The complaint filed by the U.S. Drug Enforcement Administration and the Department of Justice, charges Hizbullah with using the money to buy used cars in the U.S. for transport to West Africa, where they are then sold, mostly in Benin. U.S. Attorney Preet Bhara noted, "It...

The Islamic Republic of Iran Shipping Lines (IRISL) was charged in the United States on Monday in a 317-count indictment for providing support to terrorists and proliferators of weapons of mass destruction, prosecutors said. IRISL, one of the world`s largest shipping companies, its regional offices, and its agents were indicted for their roles in a conspiracy that illegally used financial institutions in Manhattan and evaded U.S. economic sanctions on foreign countries. "Today our office is shining a spotlight on the fraudulent activities of IRISL, which has been sanctioned by the United States, the European Union, and the United Nations for...

World trade is down 20% or more. US railroad shipments are down more than 20% year-over-year. Europe's banks have been much more aggressive in funding emerging-market expansion than US or Japanese banks. Europe's banking system is in far worse shape than the US system. The losses may be bigger, and their capital to meet those losses is certainly less. Let's look at some charts. Remove sharp objects or pour another adult beverage. And Then There Was Leverage. Thirty times leverage means that if you lose 3.3%, you wipe out all your capital. Regulators in the UK allowed 20:1 leverage on...