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To: Vince Ferrer
On this issue I agree with her.

How so?

The Government does not belong in manipulation of the economy, they exist to provide and equal and just playing field for everyone, that is all.

Regulations, acts, central banks write laws to benefit those who are in political favor and give a quid pro quo, not for America and it's citizens in general.

9 posted on 07/19/2013 4:57:14 PM PDT by Las Vegas Ron (Rats vs. GOPe = Same train, different speed.)
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To: Las Vegas Ron

Not so long as the American taxpayer is providing guarantees on deposits, which we are. Given that, we should limit how much those funds can be put at risk, and also we should not be guaranteeing an institution to the size that it becomes ‘too big to fail’.


13 posted on 07/19/2013 5:00:18 PM PDT by 9YearLurker
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To: Las Vegas Ron
On this issue I agree with her.

How so?

Because I would like to limit the amount of government funds that banks can grab from taxpayers through bailouts. The FDIC was initiated in the Great Depression to boost confidence in the banking system by guaranteeing regular citizen's customer deposits. Glass-Steagall was also implemented around the same time to separate retail banking, in which the FDIC guarantees, from commercial banking. Banks would have to absorb the losses themselves from commercial banking activity that went bad. This protected ordinary citizens from the excess risk taking of the banks pretty well.

When Glass-Steagall was repealed, retail and commercial banks began to combine, and engage in more risky activity, especially when interest rates kept going down. The line between what the government was obligated to support became cloudy, as in 2008. In order to protect the consumers, the government got conned into bailing out the whole banking system.

We are not going to get rid of FDIC insurance, but I would like to reduce the government's exposure, (and therefore my exposure as a taxpayer), to the bank's risky trading activity. Separating retail banking under FDIC coverage from speculative trading would help that.

If this doesn't happen, the FDIC is not big enough to bail out the banks, and we are not going to pass another 800 billion TARP program to bail out the banks. What would happen is what did happen in Cypress, a bail-in. This would mean that all deposits would be confiscated and turned into the bank's equity, i.e. stock, at a very low rate of conversion. Depositors would be wiped out. This isn't speculation, the US and Europe have published documents stating that this is the plan for another 2008 style meltdown.

26 posted on 07/19/2013 5:31:31 PM PDT by Vince Ferrer
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