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Numerous Top Bankers Call for Break Up of Giant Banks

George Washington's picture





 

 

Banking Titans Call for Break Up of "Too Big to Fail"

The following bankers are calling for the big banks to be broken up:

  • Former managing director of Goldman Sachs - and head of the international analytics group at Bear Stearns in London- Nomi Prins
  • Numerous other bankers within the mega-banks (see this, for example)
  • Former Natwest and Schroders investment banker, Philip Augar
  • The President of the Independent Community Bankers of America, Camden Fine

Top Economists and Financial Experts Agree

It's not just bankers.

The following top economists and financial experts believe that the economy cannot recover unless the big, insolvent banks are broken up in an orderly fashion:

  • Dean and professor of finance and economics at Columbia Business School, and chairman of the Council of Economic Advisers under President George W. Bush, R. Glenn Hubbard
  • Former chief economist for the International Monetary Fund, Simon Johnson (and see this)
  • Former 20-year President of the Federal Reserve Bank of Kansas City - currently FDIC Vice Chair -  Thomas Hoenig (and see this)
  • The leading monetary economist and co-author with Milton Friedman of the leading treatise on the Great Depression, Anna Schwartz
  • Economics professor and senior regulator during the S & L crisis, William K. Black
  • Professor of entrepreneurship and finance at the Chicago Booth School of Business, Luigi Zingales

Click here for background on why so many top bankers, economists and financial experts say that the big banks should be broken up.

 


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Fri, 07/27/2012 - 10:36 | Link to Comment therearetoomany...
therearetoomanyidiots's picture

What I find interesting is that in the past 1 year 3 physical bank buildings have been built within about  a 3  mile radius of my house in the far east end of Naples.   3!  No one lives out here but  there are two new Chase and a BOA that have gone up and each locations, literally, has 2 or three banks next to it. 

So, you tell me what the long term thinking on banks is....there will just be fewer of the big guys.   Just as happened with the brokerages and like how GE just happens to be thriving with no tax burden and unliminted government oversight.  

Fri, 07/27/2012 - 10:54 | Link to Comment Bob
Bob's picture

Can you see them pulling the same joker from the deck as the MIC is now attempting to play with "costing jobs" by decreasing military spending if/when we attempt to pry them off the goobermint tit?

Fri, 07/27/2012 - 09:37 | Link to Comment Icantstopthinki...
IcantstopthinkingaboutNINJAs's picture

Someone will be getting paid for breaking up the banks...

 

 

hmmm take one large insolvent megabank. 

Smash it into pieces. 

Give some huge chunk of debt to each piece so that the little pieces are also equally insolvent.

Use my hedge fund to acquire the little pieces' assets.

Use my new little pieces' debt to allow me to write off the taxes on any profits I make in perpetuity.

 

Fri, 07/27/2012 - 09:37 | Link to Comment Getting Old Sucks
Getting Old Sucks's picture

Hello, Timmy?  Jamie here.  OK, we broke up JPM.  JPMorgan Investments and Chase Bank.  I'll be staying on with JPMorgan Investments.  Could you let the FDIC know that they're the new owners of Chase Bank for me.  Have a nice day.

PS  Uh, Chase Bank doesn't have any money left so tell the FDIC to bring a lot of cash.

Fri, 07/27/2012 - 09:35 | Link to Comment grekko
grekko's picture

Somewhere in Texas, somebody is shouting "Someone get me a rope!"

Fri, 07/27/2012 - 09:15 | Link to Comment swmnguy
swmnguy's picture

Well of course the old leaders of the TBTF's would say the TBTF's need to be broken up.  The TBTF's are all totally insolvent, so they'll go away one way or another; either via bankruptcy or by some unholy merger with government.  The only question is whether or not criminal behavior will or will not be addressed.

That's not what's motivating these people to speak up; not now. 

Somebody much wiser than I once told me that people only really want to know 3 things about a collaborative venture: Who's in charge, What are the rules, and Will the rules be enforced.  If they don't get clear answers, that stay consistent, to those 3 questions, they start to wander off and provide their own answers, and the venture falls apart. 

Since it's becoming clear in our Finance system that the thieves are in charge, the rules are constantly in flux, and they will only be enforced upon us and never for us, people are starting to lose faith in the system.  In a totally abstract economic system, the one thing that has to always be there is that faith.  If people start to decide the system cannot and will not work for them, whether or not they have an available alternative, they won't put money into their IRA's and 401k's.  They won't do cash-out refinances.  They won't carry large credit card balances.  Those few who still have pensions don't want them because they know their bosses have rewritten the rules so they don't have to fund those pensions, and the pensions won't pay out the promised benefits because they can't.

Once a critical mass of people don't believe in an abstract system anymore, it ceases to function properly.  It doesn't take 50%+1; far fewer.  These Gray Lions of Finance are speaking up now to create the illusion that there's something fixable about this system.  They have to criticism the current state of affairs because anyone can see it's FUBAR.  So if they propose fixes that don't have a snowball's chance of happening anyway, it won't harm the grift, but it might re-awaken the faith of those who have lost faith in the system.  Not everyone; but maybe enough to get back from that tipping point.  And people would like their faith to be restored.  We have eliminated most of the alternatives to our global, faith-based rigged finance system.  It's pretty scary to watch that system implode, with no viable alternatives in view.

I don't think it will work.  From about the time of Julius Caesar on, everybody in Rome knew they should restore the Republic, stop having dictators, and reign in the outrageous excesses of the wealthy which led to all the wars and so on that were destroying Rome.  They knew that perfectly well for 500+ years.  But they never did it, because that would mean those living such supremely self-indulgent lives would have to tone it down a little.  By the time the Visigoths and Vandals showed up, Rome had pretty much sacked itself.  And many people probably thought it was a good thing too.  Same dynamic here. 

Fri, 07/27/2012 - 08:58 | Link to Comment Careless Whisper
Careless Whisper's picture

This is better than Mafia Wars. Looks like Citi has come to the realization that they can't compete with downtown mafia bank Goldman, or uptown mafia bank Morgan, so they say bust 'em up.  

Fri, 07/27/2012 - 09:47 | Link to Comment grekko
grekko's picture

I think it's just another case of the elite on the outside feeding on their own (still on the inside) so they can say "I told you so" after the crash.

Fri, 07/27/2012 - 08:59 | Link to Comment GMadScientist
GMadScientist's picture

I know it would be terribly convenient to wind-down these criminal enterprises and have some assurance that you've cleaned up all those skeletons you left behind when you retired before they suddenly make an appearance in a district court (perhaps even resulting in a clawback of the pool you're lounging near and the Lafitte in your chubby thieving hands).

Tell-tale heart, bitchez.

 

Fri, 07/27/2012 - 08:56 | Link to Comment wagthetails
wagthetails's picture

won't happen.  It's easier for the gov't to rig the system if they only have to deal with 2-3 banks.  just think of how hard they'd have to work if they need to coordinate dozens.  sorry charlie. 

us commoners are just to simple to be trusted with the economic truth, i for one thank the gov for keeping us in the dark. 

Fri, 07/27/2012 - 08:52 | Link to Comment nathan1234
nathan1234's picture

So the fools all turned wise men suddenly when their game is up. !!!!

Thye need to be put behind bars before facing the electric chair for colluding and carrying on the farce all these years.

The damage done to the world is so immense that no mercy should be offered.

 

 

 

Fri, 07/27/2012 - 09:29 | Link to Comment eatthebanksters
eatthebanksters's picture

You've never heard of a death row conversion?

Fri, 07/27/2012 - 08:55 | Link to Comment GMadScientist
GMadScientist's picture

There is the small problem of what they did being perfectly legal (albeit due to their ability to manipulate the legislative process almost at will).

Fri, 07/27/2012 - 09:30 | Link to Comment eatthebanksters
eatthebanksters's picture

I'm certain a few laws were broken here and there...if only our AG really wanted to look...

Fri, 07/27/2012 - 09:37 | Link to Comment grekko
grekko's picture

He's too busy selling guns to Mexican Drug Lords.

Fri, 07/27/2012 - 09:53 | Link to Comment Bob
Bob's picture

And his sociopathic counterparts on the "other" side of the illusory partisan aisle are finding moral outrage only for his alleged failure to properly investigate the death of a single border agent. Not a peep about the biggest criminal heist in the history of mankind. 

AmeriCunt politics in a nutshell. 

Fri, 07/27/2012 - 08:48 | Link to Comment BeetleBailey
BeetleBailey's picture

.....kind of like saying the Gambino crime family needs to be broken up....

...but no arrests...and the pieces can loot and fuck over people afterward.....

...unless there are arrests, trials and prosecutions, none of this is worth a flying fuck.....

Fri, 07/27/2012 - 08:42 | Link to Comment nick howdy
nick howdy's picture

I'll let Barry know what's going on and that the TBTF banks still exist..Obviously he's being kept in the dark. ...I've been possibly invited for a chance to win if I donate $10 to his big birthday bash on the 4th...So I'll him know then.

Fri, 07/27/2012 - 09:39 | Link to Comment grekko
grekko's picture

I'll give you some fresh eggs from my coop to take along and give him.  Note that they work best from about 7-10 feet.

Fri, 07/27/2012 - 08:29 | Link to Comment Widowmaker
Widowmaker's picture

Break up old banks so that we can print new banks.

All the while ducking the conversation of institutionalized corruption and fraud - STILL ENTRENCHED!

Nice try -- for a fucking racket.

First we turn them inside out, prosecute and THEN the carcass can be chopped.

Without prosecution, breaking them up does nothing but hide the bodies -- which is exactly why all these faggots want to break up before they are found out cheating in the gay bar.

Fri, 07/27/2012 - 07:55 | Link to Comment I am on to you
I am on to you's picture

HUSTON HUSTON:

We have touchdown.

The Mafia wants to be brokken up,the family is in equelibrium,and i am a Nobel man to,with out any NobelPrice,G the4,s is strong out there,in the banker Orbit!

Fri, 07/27/2012 - 08:30 | Link to Comment NuYawkFrankie
NuYawkFrankie's picture

I smell a RAT.

 

Well, I guess with so many RATS jumping ship and scurrying ashore - like, Greenspan, Mervyn KIng, Weil.... - the overpowering stench is not surprising is it?

Criminal gangs usually DO break-up and disperse after a heist - makes it so much harder to track them down. Same here - only they have they gall to suggest that they're doing it outta the goodness of their hearts - and not to cover their tracks.

The fact of the matter is that: the TBTF's have ALREADY accomplished their goal by STEALING $20TRILLION and counting.  Whether they are broken up now is IRRELEVANT. The PERPS have the  dough and YOU have the DEBT. UNless this is REVERSED and the PERPS PROSECUTED breaking up the TBTS is a red-herring, a distraction a sleight-of-hand, a dog and pony show..... capisce?

Beware of The PERP-TRAITORS elbowing their way to the front of The Reform Parade - or YOU will go down - and rightly so - as the THE BIGGEST  SUCKERS in HISTORY, the DUMBEST MF'ers in RECCORDED HISTORY bar none. 

 

Fri, 07/27/2012 - 08:47 | Link to Comment Papasmurf
Papasmurf's picture

Breaking them up now is just more of the heist.  The goal would be to divy solvency to the gambling/investment banking portion while leaving the traditional banking side broke and again at the taxpayor tit for another infusion of largess.

Fri, 07/27/2012 - 10:11 | Link to Comment barkster
barkster's picture

exactly. Watch the plum assets go into one company and the bad assets into another. Then VOILA! The bad company goes belly up and the banksters are holding the remaining good assets.

Fri, 07/27/2012 - 09:47 | Link to Comment Bob
Bob's picture

Snap

Fri, 07/27/2012 - 07:50 | Link to Comment silverdragon
silverdragon's picture

Silver on the up!

Fri, 07/27/2012 - 07:53 | Link to Comment Widowmaker
Widowmaker's picture

Interesting, I hear tongues are wagging about a hard silver drop -- high teens.

Fri, 07/27/2012 - 08:50 | Link to Comment n8dawg84
n8dawg84's picture

That would present a lovely buying opportunity.  Here's hoping!

Fri, 07/27/2012 - 07:50 | Link to Comment Capt. Ray
Capt. Ray's picture

 

first banks take money.

then they break up.

...clever...

Fri, 07/27/2012 - 09:57 | Link to Comment Bob
Bob's picture

I think we often confuse "the banks" and the self-dealing gangsters who sociopathically exploit the vast stores of OPM those institutions control. 

Corporate jets, executive dining rooms, million dollar CEO office furnishings, mind boggling "compensation" packages, the social status of royalty (literally) are not for the benefit of any of the institutions themselves. 

Condemning "the banks" misses the most glaring problem.  Not that it makes any kind of good sense to leave financial WMD's intact, of course, but still.

Is it really any wonder that the Banksters Emeritus are making quiet noises about "the banks"?

Their real loyalty was never to the banks. 

Fri, 07/27/2012 - 07:45 | Link to Comment Meesohaawnee
Meesohaawnee's picture

yea.. like they want to do it "for the good of the masses" thats a thing of the past in this country.. like i said. quit thinking in the norm of "should" rather than what does. Ben "should" leave this market alone and quit manipulating it. There "should" be handcuffs.. think on "what does" happen.

Fri, 07/27/2012 - 07:40 | Link to Comment lindaamick
lindaamick's picture

There must be some strategy brewing that has prompted these retired crooks to come out of the woodwork.

They either need to preserve their booty or are planning to jump back into the game.

Maybe retirement is boring.

Or maybe they have figured out some new way to screw the people during a restructure of the big banks.

I guarantee their interest in the matter is purely sociopathic.

Fri, 07/27/2012 - 08:49 | Link to Comment Papasmurf
Papasmurf's picture

"I guarantee their interest in the matter is purely sociopathic."

 

Almost by definition of banker.

Fri, 07/27/2012 - 08:22 | Link to Comment Solarman
Solarman's picture

Maybe they are scared (LIBOR), and want to distrat by showing they are responsible.  The end gaame is already here.

Fri, 07/27/2012 - 07:36 | Link to Comment Joe A
Joe A's picture

I think if any of these people would read ZH (and I am sure some of them do) then they would find out that many respondents here would not mind breaking up the big banks AND PUT THEIR MANAGEMENT IN JAIL.

I thought that last part was missing.

Fri, 07/27/2012 - 07:31 | Link to Comment Racer
Racer's picture

A lot of formers in that lot!!  Hmmmmmmm. Now they say it??!!!!

Fri, 07/27/2012 - 07:55 | Link to Comment Widowmaker
Widowmaker's picture

Remember, "no one sees it coming."  

Fri, 07/27/2012 - 09:10 | Link to Comment Bob
Bob's picture

Just as was true with the "Global Financial Crisis," plenty of people saw the current banking mafia ahead.  In government, they were relentlessly purged by the tools of Chicago and Austrian neoliberal "economics."  Regulatory "capture" was tirelessly cultivated . . . and it wasn't an "outside job."

http://www.zerohedge.com/contributed/2012-07-24/reinventing-crony-capita...

Yet the storm troopers of neoliberal economics are still given respect. 

Fri, 07/27/2012 - 07:12 | Link to Comment JOYFUL
JOYFUL's picture

George has been very very busy....new post every 6 hours on the average? Something tells there's some heat travelling down the wire...and a build up of friction!

Numerous "top economists", to which we now add "top bankers"...Good Lord, we even have Pat Robertson brought on stage to join the choir...what's he? A top flight evangelist? ////gotta be tru - MDB has done a reverse takeover of the GW Blog! Since lunatics, liars and hi-larity are now the order of the day here....

it's not hard to imagine the following exchange...

Bronfman: get Dimon on the line -now!

Boss?

My people tell me we have another problem with the fringe blog....You told me we'd fixed that problem...

We did! We own that thing! We got people all over it!

Well your people don't seem to be the right ones! Get that fucking thing under control now or you'll be enjoying the Diamond Life like your buddy.

But but Bo....click.

Dimon to nameless minion in charge of 'Korporate Assets':  What the fuck is the problem now at that blog thing yu were supposed to take care of?

Problem? I don't know! Give me a couple of minutes to talk with the department

Fuck that...Man's all over my ass...I'll give yu thirty seconds to figure it out, or you'll be in the Bay before breakfast, wearing the latest concrete fashion accessories....click.

George! What the fuck are you doing there? This Banksters Operation was supposed to be a seamless launch...we gave yu all the support you needed...I'm getting heat, You hear me, I'm gettin heat! If I go, your dead meat!

Ok, Ok, I hear you...we need to do a little bit of damage control, that's all...there's no need for panic.

Listen, listen to me good...you straighten out that thing today and straighten good, or your  your ass is in the sling....click.

Fri, 07/27/2012 - 08:16 | Link to Comment I am on to you
I am on to you's picture

Seems like something is moving:

And like you,i noticed,Top Economists:But i have to confes,i dont understand the mening of the,! Top Economist,but what the heck,what do a bricklayer know about Rocket science!

Fri, 07/27/2012 - 08:50 | Link to Comment JOYFUL
JOYFUL's picture

The whole thing reeks of desperation...

there's got to be something big ready to pop! George is bringing everything but the kitchen sink in trying to convince folks that accomplices, underlings and even bigwigs of the moneypower are suddenly united with the peeple in a kommon kause against BIG WH|AT||EV|ER[a suitably murky, ill defined demon that will never quite be met up with, but serves a smokecreen for the kon being attempted]

It's all optics, of course, and the fact that George is so outrageously out front about his hookup with the higher ups signals this is the point of no return....his status as long term sleeper agent here has been exposed, and once an asset in the counterintel bizness is made visible, it becomes expendable....

it may not be totally clear yet, but this is a huge break point in the ZH timeline - we are witnessing an end-game, the shadowy configurations of which are still not possible to completely make out. Something evil cometh this way...

Fri, 07/27/2012 - 13:40 | Link to Comment forexskin
forexskin's picture

let me put all your posts in quotes for you:

"i'm just so subtly klever and witty, blah blah, see, i can spot konspiracies you just miss, and you're just not, well, me, blah blah blah"

that about cover it?

Fri, 07/27/2012 - 07:10 | Link to Comment silverdragon
silverdragon's picture

Withdrawal Sanction,

Your logic stands up mate the f*ckers will try and socialize the debt.

Fri, 07/27/2012 - 08:56 | Link to Comment Bob
Bob's picture

The entire financial system is built to "socialize" debt . . . whether government seems to occupy a pivotal position (at present) or not. 

Take a look at the financialization of the real economy.  Worldwide

https://en.wikipedia.org/wiki/Financialization

The current popular understanding of "socialization" as an inherently government function is profoundly inadequate. Private predatory parasites live on "socializing" externalities; they cannot live without it, government or no government.

Michael Hudson: The Road to Debt Deflation, Debt Peonage, and Neofeudalism

http://www.iadb.org/intal/intalcdi/PE/2012/09985.pdf

Fri, 07/27/2012 - 06:48 | Link to Comment Withdrawn Sanction
Withdrawn Sanction's picture

See a pattern here?  Shills, central banking whores, and banksters themselves all calling for break up of TBTFs?  Classic misdirection.  It's not size per se that matters, but whether losses have to be eaten by those who made the bets or whether such losses can be socialized.  5,000 little banks sending their losses to the Treasury or central bank can be just as bad as a handful of mega banks doing the same thing.  As the old aphorism goes, capitalism w/o losses is like religion w/o hell.   Keep your eye on the ball.

Fri, 07/27/2012 - 08:54 | Link to Comment GMadScientist
GMadScientist's picture

Capitalism and religion have so much more in common though:

 

- You need to have faith (no rational explanation can be provided)

- Both involve coercion of the masses (marketing or sermon, take your pick)

- Both leverage your instincts against you

- Both can cause you just as much harm as good

 

Fri, 07/27/2012 - 06:43 | Link to Comment Doubleguns
Doubleguns's picture

Most of them are "Former" somethings. They must be looking for jobs. Breakups create job opportunitys to get back into the theft business.

Fri, 07/27/2012 - 06:53 | Link to Comment Satan
Satan's picture

Sorry, English isn't my first language. Does "former" mean ' I have ass raped this carcass for all it is worth and got my pension so I don't give a shit'?
Or does it mean something else ?

Fri, 07/27/2012 - 06:41 | Link to Comment falak pema
falak pema's picture

I feel that the Dodd Frank legislation and Volcker rule is a false flag to protect status quo in the US. 

The whole financial community has to be regulated and broken down to PRE Reagan days. Simple as that. Regulate the casino AND impose deficit spending regulation to avoid Government, states, municipalities spending more than they earn.

Golden rule or near golden deficit spending rules necessary at all levels of government and Maastricht like debt ceilings. 60% of revenues. 

More so, the international monetary system has to be overhauled to be based on a commodity basket; not on pure fiat.

More so, the private banking system, once G-S breakdown occurs, and regulation in place to avoid all naked derivative plays; taxed if necessary on Tobin basis for remaining transactional bets; should move away from fractional reserve of 10% equity to much higher equity ratio and be constantly obliged to mark to market by regulators; and all compound interest payment abolished and time value of interest simplified. 

Now we talk TRUE reform of banking and monetary nature! 

 

Fri, 07/27/2012 - 09:01 | Link to Comment GMadScientist
GMadScientist's picture

Very well-stated, especially the focus on a top-to-bottom analysis of the problem. Bravo.

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