Bartlett Naylor: The Banks Are Becoming Untouchable Again
And while legislation was passed in the aftermath to place restrictions on the ‘Too Big To Jail/Fail’ banks, it was heavily watered down and has been under attack by finanical system lobbyists ever since.
To talk with us today about the perpetual legislative warfare pitting citizens on one side and lobbyists (and many lawmakers) on the other, is Bartlett Naylor. Naylor is a veteran of the Wall Street wars. He spent a number of years as an aid to Senator William Proxmire at a time when Proxmire was head of the Senate Banking Committee. Naylor himself served as that committee’s Chief of Investigations.
Sadly, Naylor sees the banks winning out here. More and more of the prudent restraints placed on the banking system are being dismantled, as further evidenced by the recent bill President Trump just signed:
The President signed S2155 last week. This bill has 40 or so provisions in it. The most troubling one reduces what’s known as enhanced supervision for a class of banks that are between $50 billion and $250 billion in assets.
Enhanced supervision means tighter capital controls. Capital is assets minus liabilities — the amount of net worth, if you will, of the particular bank. You think of banks of being very solid; but in fact, they’re in hock. They are highly leveraged. 95% of their assets are financed by debt. They really don’t own that much. They mostly owe things.
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