Former Top U.S. Bank Regulators Says Financial System Not Ready For Next Downturn

Share to twitterThomas Hoenig, ex-vice chairman of the Federal Deposit Insurance Corp. , in a television interview during the Kansas City Fed’s Jackson Hole economic symposium in 2015. Photographer: David Paul Morris/BloombergU.S. firms today are carrying a heavier debt load relative to the size of the economy than they.

In part because of a potentially naive self-assurance among policymakers that their post-2008 crisis reforms have gone a long way toward making the banking system safer.," Fed Chairman Jerome Powell said: “Regarding ... leverage in the financial system—today banks at the core of the financial system are fundamentally stronger and more resilient. Our post-crisis regulatory framework is based on robust capital requirements backed by strong stress tests, resulting in much higher levels of capital in the banking system.”U.S. corporate debt has risen to record levels, raising worries about how firms might handle a downturn.

“I am being told that mega banks are better capitalized than in 2008. But since they had almost no capital then, it is a hollow comparison,” . “Better is not the same as adequate. They have now noticeably increased balance sheet risk with little additional equity.” Hoenig is right. Not only are postcrisis capital requirements likely too low to withstand another serious financial debacle, but Donald Trump's economic teamThe Fed’s former chief regulator, Daniel Tarullo, recently complained banks seem to be suffering from a “Capital requirements for banks should be going up, not down,” he said. “Now would be an opportune time to make use of

Source: Financial Digest (financialdigest.net)

Why the whole banking system is a scam - Godfrey Bloom MEP (All the banks are broke - Fractional Reserve Banking)

Is your BANK INSOLVENT/BANKRUPT? Will You Get Your Money In A CRISIS? (Most banks have less than 3% of deposits actually covered based on Cash To Deposit Ratio)

European Debt Crisis

pdacosta Considering that no one back then was all that interested in actually reining in the banking sector, this is not surprising in the least.

They’re not overestimating anything, they’re well aware that they stand to make money either way since they are the private institutions that loans out bail out money.

Yes banks hold more capital but the derivatives and counter party risk is still there.

When was the last time feds actually had a clue?

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