TheVoiceOfJoyce

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  According to Thomas Hoenig, reporting in the FT 8/20/13, a Vice Chairman of the FDIC, ” recent research found no evidence that higher bank capital leads to lower volumes of loans over the long run.  ” Given the magnitude of the Financial Crisis of 2008;     does anyone really believe that greater capitalization of the Banks would not have helped stave off the “Collapse of our Monetary system ” and more importantly prevented the collapse of our Middle Class way of life, through “our wealth destruction.”

• What would we be prepared to propose if we could have gone back in time.  Thomas Hoenig has one answer, Bank Capitalization.  The same response as Peter Orsag.  Again, we must ask how much?  And given the Culture of Greed, we can’t trust we must verify total bank assets, “on and off ” their balance sheets.  Remember, the same player’s circle the Globe, the culture is pandemic.  Can the culture change?   Not while “The Wolves of Wall Street” are alive and doing “just fine”.   Unless we have Regulations, a Bill , that holds Bankers and Bank wannabees accountable and responsible,  otherwise, “The Wolves of Wall Street ” will continue to survive at everyone’s expense.
• According to Mortgage News Daily , 5/3/2010, Total loans among all Banks amounted to $7.28 Trillion while total deposits were $9.22 Trillion.  Banks are operating at a Loan to Deposit Ratio of 79%?  WOW!  As a small business owner, I know you can’t make money at that level.  For years my business was solvent and profitable when debts were at 25- 30% of revenue.  Not more….  When the debt level approaches 50% you break even.  Beyond that you’re operating in a deficit.  This is not “rocket science”.  ( To be fair,  we aren’t considering  the “other investments” Banks are making.    That’s part of the problem, what % of the other assets are 100% liquid like deposits? )
• It certainly looks like we made the “Banking instruments” obscure in order to prevent any analysis of ” real” Bank assets and liabilities.  No more!  TBTF, has real meaning for the Middle Class, it destroyed our way of life.  Lesson learned.
• I like the “ring” of owner equity in Banking.  It is a cushion against risk.  Banks could and should be taking in deposits and lending against those deposits.  That’s the Bank’s business.  Low risk.  Necessary in a world of “creative banking,  having the latest micro second trading capacity.”
• Now that Basel 3 is retrenching in the wake of lobbyists and Banks, America has a chance to lead the world in Monetary stability.  Only a fool would stay away from a well capitalized Bank or flee from strength?

In a Democracy, we have a choice when Politics affects us!