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Bill Dudley On Breaking Up Too Big To Fail Banks: "Don't"

Tyler Durden's picture


In a day full of "shocking" announcements, we just got the latest one. Because it must be truly a shock that none other than Goldman's Bill Dudley, who also moonlights as head of the New York Fed, is stoically against the break up of America's systemically critical, massive and 100% untenable FDIC-insured hedge funds, pardon megabanks. Such as Goldman.

From a just released speech ironically titled "Too Big To Fail"

I am not yet convinced that breaking up large, complex firms is the right approach.  In particular, these firms presumably exist, in large part, because there are scale or network effects that allow these firms to offer certain types of services that have value to their global clients.  These benefits might be lost or diminished if such firms were broken up.  In addition, the costs incurred in breaking up such firms need to be considered.  Finally, the breakup of such firms would not necessarily result in a significant reduction in overall systemic risk if the resulting component firms were still, collectively, systemic. 

That is so wrong and frankly moronic, as to border on the grotesque.

These megabanks only exist because the regulatory and financial climate in the US (and the entire world) is one which promotes consolidation to such a point where it is in every bank's best interest to become as big and as systematically critical as possible in the shortest amount of time, and thus to always get bailed out whenever it is threatened with that other part of the Return equation: Risk.

For Dudley to not even remotely admit this is disingenuous, naive and frankly, idiotic.

The remainder of the Bill "just eat hedonic iPads" Dudley's drivel can be found here.


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Thu, 11/07/2013 - 14:51 | 4131912 digitlman
digitlman's picture

Fuck Bill Dudley.


Up the ass.



With a SCUD missile.

Thu, 11/07/2013 - 14:58 | 4131945 jbvtme
jbvtme's picture

"NELL...I can't beelieve it!"  Dudley DooRight

Thu, 11/07/2013 - 15:06 | 4131979 Manthong
Manthong's picture

The gent has earned pole position..

in the guillotine line.

'tis a far, far better thing we do to him..

Thu, 11/07/2013 - 15:08 | 4131997 jbvtme
jbvtme's picture

does anyone know if you can make thumb screws with a 3D printer?

Thu, 11/07/2013 - 15:14 | 4132012 Xibalba
Xibalba's picture

Tres. Sec in waiting...

Thu, 11/07/2013 - 15:19 | 4132026 Steve in Greensboro
Steve in Greensboro's picture

TBTF banker says "...I am not yet convinced that breaking up large, complex firms is the right approach...."

Fully agree.  Who is going to decide how the breakup should be structured?  Obama?  Give me a break.

But in the next crisis every bank gets the Lehmann treatment.

Thu, 11/07/2013 - 15:22 | 4132034 James_Cole
James_Cole's picture

Finally, the breakup of such firms would not necessarily result in a significant reduction in overall systemic risk if the resulting component firms were still, collectively, systemic. 


Thu, 11/07/2013 - 15:28 | 4132066 nope-1004
nope-1004's picture

Someone fill me in.  Who is Bill Dudley and what importance does he have to my suffering town?  Does he make clean water?  Does he create manufacturing jobs?  Does he provide essential services to seniors?

Please forgive my ignorance.  Since he said something in the media, he must be important to the millions on food stamps, millions unemployed, and thousands of small businesses that are closing annually.




Thu, 11/07/2013 - 15:58 | 4132192 FEDbuster
FEDbuster's picture

I switched all of my accounts from TBTF/TBTJ banksters in 2009.  Boycott the fuckers.  Remember if we are on a gold or silver standard, you can can buy as much as you want with your FRN's at a rate of $1306 and $21 per troy oz.  Fuck the FED and their fiat toilet paper.

Thu, 11/07/2013 - 16:09 | 4132230 Herd Redirectio...
Herd Redirection Committee's picture


Centralization causes too much power to go into too few hands, hands which are then corrupted, fucking the entire system. 

Thu, 11/07/2013 - 16:30 | 4132287 BigJim
BigJim's picture

Dudley left it a bit late to make his Fed chairman election campaign speech, didn't he?

Thu, 11/07/2013 - 17:34 | 4132530 Richard Chesler
Richard Chesler's picture

In-your-face, Obozo style corruption.

Thu, 11/07/2013 - 18:08 | 4132679 Nigh Eve
Nigh Eve's picture

He is a naive ivory-tower inflationist.  

Thu, 11/07/2013 - 15:26 | 4132006 Cacete de Ouro
Cacete de Ouro's picture

It's a G30 world

And here are the rest of the nest of Vipers
Including Carney
and Mario
and Larwyy

G30, we like to control the IMF also, and the World Bank and IFC, that's why we have the same office suite and even the same fax number as that other major front / lobbyist, The Bretton Woods Committee

The Bretton Woods Committee
1726 M Street, NW, Suite 200
Washington, DC 20036, USA
Fax 202-785-9423

Group of 30,
1726 M Street, NW, Suite 200
Washington, DC 2003, USA
Fax 202-785-9423

We don't even have to put an NSA tap on the fax machine, we just read the eh?

Thu, 11/07/2013 - 15:06 | 4131988 Four chan
Four chan's picture

lets see, the banks own nothing but debt created out of thin air and are completely

insolvent since having ditched mark to market,

it seems to me they are already broken up in the sence they hold essentially nothing real or secure.

Thu, 11/07/2013 - 15:22 | 4132035 Cthonic
Cthonic's picture

Nice tits, though brains they are not.

Go see what those insolvent entities sucked out of thin air in the way of compensation in the past five years of non-lending.  That's a trick only a TBTF can pull off.

Thu, 11/07/2013 - 16:32 | 4132292 BigJim
BigJim's picture

In exchange for all that thin-air money, the banks have claims on probably 25% of the world's wealth.... and will seize it if their debtors can't pay off.

Pretty good racket if you ask me.

Thu, 11/07/2013 - 15:06 | 4131986 slotmouth
slotmouth's picture

They exist because assholes like you keep bailing them out!

Thu, 11/07/2013 - 19:21 | 4132888 ajax
ajax's picture



Ok Mr. Dudley we get it: status quo. Next bailout will be 100% financed by you and all your fellow banksters. Your salaries, bonuses, art collections, cars, yachts, planes, real estate etc.

Is that a fair deal?

Thu, 11/07/2013 - 15:15 | 4132014 ArkansasAngie
ArkansasAngie's picture

Dudley just confirmed that the "market" infrastructure is a public utility and a not for profit manipulative corruption vehicle

It isn't a rent extraction tollway for parasites

Thu, 11/07/2013 - 17:48 | 4132601 sgt_doom
sgt_doom's picture

I too am shocked that Billy Dudley, member of the Group of Thirty, founded by the Rockefeller Foundatin in 1978 to speak on behalf of the central banksters and speculators, would suggest such a thing.  (Disclaimer:  personally sd believes they should be razed to the ground, allowing nothing living to be left of them!).

And what a charming bunch they (Krugman, Summers, Draghi, Trichet, barf, barf, barf, ...) are:

(Let's hear it for those Rockefellers, owners of so much, and former owners of the Warren Commission and Allen Dulles and John McCloy!)

Thu, 11/07/2013 - 21:53 | 4133488 HardAssets
HardAssets's picture

Goldman + NY Fed = B.S.

I don't even bother reading what comes from a source like that.

Thu, 11/07/2013 - 14:51 | 4131913 Magnix
Magnix's picture

Good time for bank run?

Thu, 11/07/2013 - 15:36 | 4132100 B.J. Worthy
B.J. Worthy's picture

Is it ever a bad time?

Thu, 11/07/2013 - 14:52 | 4131914 Stoploss
Stoploss's picture

Oh, well that will take care of itself when treasury's collapse.


Thu, 11/07/2013 - 14:59 | 4131958 LawsofPhysics
LawsofPhysics's picture

Yes, that or the supply lines for essential commodities breaks < SNAP > at which point, and only at this point does "shit get real".

Same as it ever was.

Thu, 11/07/2013 - 14:53 | 4131917 rtalcott
rtalcott's picture

Make simple concepts complex and complex problems's a great strategy to confuse the issue.

Thu, 11/07/2013 - 14:52 | 4131919 MrPoopypants
MrPoopypants's picture

I don't want .gov breaking them up. I want a free market to do it as it should be.

Thu, 11/07/2013 - 14:57 | 4131946 NOTaREALmerican
NOTaREALmerican's picture

Is a "free" market free enough to be manipulated by really smart-n-savvy people resulting in a less than "free" market, or is there something about a "free" market that keeps the smart-n-savvy people from manipulating it?

Thu, 11/07/2013 - 15:06 | 4131989 A Lunatic
A Lunatic's picture

Reintroduce equal treatment under the law and see what the fuck happens to TBTF........

Thu, 11/07/2013 - 15:32 | 4132080 NOTaREALmerican
NOTaREALmerican's picture

Is "the law" just something the adults tell bullshit stories to the children about, while the adults prove they are adults by working out creative ways to avoid "the law"?

Thu, 11/07/2013 - 15:54 | 4132171 A Lunatic
A Lunatic's picture

Sadly, this is the result of the application of situational ethics (among other things) on a national scale. The fact that some get a pass while others must pay in full is due to government meddling and corporate greed, not 'free markets' or 'capitalism' as the propagandists would have you believe. We have petty thieves doing lengthy prison sentences while the criminal elite enjoy positions of power and authority over the citizenry. Can you not see this?

Thu, 11/07/2013 - 16:05 | 4132219 NOTaREALmerican
NOTaREALmerican's picture

Re:  Can you not see this?

And can you not see that the difference between an adult and a child is in living a duplicitous life.

Duplicity is the key to success, and self-delusion is the key to happiness.

The adults manipulate the children with bullshit about "laws" and "morals".   Some children never figure things out.

Duplicity, ask for it by name!

Thu, 11/07/2013 - 16:10 | 4132232 Herd Redirectio...
Herd Redirection Committee's picture

Defeatism, brought to you by NOTaREALmerican.

Thu, 11/07/2013 - 16:34 | 4132303 BigJim
BigJim's picture

He'd make a great teammate/friend/spouse wouldn't he?

Thu, 11/07/2013 - 16:38 | 4132323 NOTaREALmerican
NOTaREALmerican's picture

Re:  He'd make a great teammate/friend/spouse wouldn't he?

I didn't say I like or support it.  I'm just telling what the reality of humans is.  

If you want to believe some bullshit about reality that's fine with me, most people do.

Thu, 11/07/2013 - 16:36 | 4132311 NOTaREALmerican
NOTaREALmerican's picture

Re:  Defeatism, brought to you by NOTaREALmerican

Point me to an ISM that deals with humans as sociopaths.   None of the ISM do:  Libertarianism, socialism, communism, & capitalism can't deal with the end-game caused by the sociopaths simply manipulating - and eating the dumbasses alive - with bullshit.

Bullshit, ask for it by name!

Thu, 11/07/2013 - 14:53 | 4131926 The Axe
The Axe's picture

Go choke on a IPAD


Thu, 11/07/2013 - 14:54 | 4131929 LawsofPhysics
LawsofPhysics's picture

So don't break them up, clear them the fuck out...

roll the motherfucking guillotines and sever some fucking heads restoring real consequences for bad behavior.  Be sure to have those guillotines roll right on down to K-street and also put an end to the gross mis-allocation and mal-investment of capital and resources once and for all.  Nothing changes otherwise...

Thu, 11/07/2013 - 16:36 | 4132310 TheReplacement
TheReplacement's picture

You could kill all the bankers and you would be ignoring the problem.  The problem stems from our government representing big money interests instead of us the people.  Fix that first.  The bankers will be solved naturally after that.

Thu, 11/07/2013 - 14:58 | 4131935 NOTaREALmerican
NOTaREALmerican's picture

Show of hands of all the OldFarts and NearOldFarts who were having "free enterprise" orgasms a few decades ago when TPTB were telling us that the US banks couldn't complete in "the world economy" and had to be allowed to merge so that "free enterprise" could flourish in the world and Merican banks would be able to lead this great-n-glorious country to greater greatness and gloryness.

Yeah, me too.   Humans worship people in nice suits.

Thu, 11/07/2013 - 15:00 | 4131966 LetThemEatRand
LetThemEatRand's picture

What they meant is that it would lead the population to being reduced to trying to make money working a glory hole, so they were kind of right.

Thu, 11/07/2013 - 14:56 | 4131941 chunga
chunga's picture

"Finally, the breakup of such firms would not necessarily result in a significant reduction in overall systemic risk if the resulting component firms were still, collectively, systemic." 

What an asshole this Dudley jerk is. Fuck him is right. Fuck you Dudley. Fuck you.


Thu, 11/07/2013 - 14:58 | 4131948 ejmoosa
ejmoosa's picture

Too Big to Function....

Thu, 11/07/2013 - 14:59 | 4131956 NOTaREALmerican
NOTaREALmerican's picture

Re:  Too Big to Function

Well, they function pretty well at moving loot to the top 10%.  

Thu, 11/07/2013 - 14:59 | 4131953 bearish1
bearish1's picture


Thu, 11/07/2013 - 15:00 | 4131959 RockRiver
RockRiver's picture

Quoted from my DOW news feed:


Fed's Dudley: Sees 'Deep Seated' Cultural, Ethical Lapses at Many Financial Firms


Really? I'm shocked.

Thu, 11/07/2013 - 15:00 | 4131960 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

In the 90s, around crises like Peso Crisis, Asian Crisis, Russian Crisis, LTCM, equity markets still were compounding at incredible rates.

At that time, emerging market oligopolies were seen as attractive yet dangerous competitors.

Hyper leveraged European banks were seen as role models for American banks to be protectors of American Financial Empire and the reserve currency.

Hence, Glass Steagall's repeal allowed large banks to use their balance sheets aggressively, and it put a nail in the coffin of the Broker Dealers in the end ... Merrill, Lehman, Bear etc.

So of course Dudley wants TBTFs. That was the whole point for these guys, to create Leviathan.

Thu, 11/07/2013 - 15:00 | 4131963 fonzannoon
fonzannoon's picture

Bill Dudley knows everyones shit's emotional right now.

Thu, 11/07/2013 - 15:01 | 4131970 jefe95
jefe95's picture

circular logic is circular

Thu, 11/07/2013 - 15:03 | 4131975 Tinky
Tinky's picture

"...these firms presumably exist, in large part, because there are scale or network effects that allow these firms to offer certain types of services that have value to their global clients."

Right, never mind that because of their insane gambling, they are fucking bankrupt. 

Dudley's photo deserves to be permenantly mounted next to the dictionary definition of asshole.

Thu, 11/07/2013 - 15:05 | 4131983 luckylongshot
luckylongshot's picture

What a Jackass!

Thu, 11/07/2013 - 15:05 | 4131984 Bosch
Bosch's picture

How about if you make a loan you fucking own it? No CDOs, etc.  Bring back the small community banks rather than the Mouth Breathing Employment Task Force known as Bank of America & Wells Fargo. 

Thu, 11/07/2013 - 15:08 | 4131993 bobbydelgreco
bobbydelgreco's picture

they should of been broken up in the 90's when ltcm went to shit but they are our masters & so our government will keep them alive

Thu, 11/07/2013 - 15:09 | 4131999 A Lunatic
A Lunatic's picture

I've yet to see my neighborhood Credit Union finance a fucking war in the M.E............

Thu, 11/07/2013 - 15:17 | 4132021 Incubus
Incubus's picture

Have any Japanese credit unions financed a mecha yet?


Seriously, let's just quit with the fucking desert bombing and leave them to sort it out with one another already.


Shift to hydrogen/alternative energies and say "fuck off" to the desert religions and their endless wars. 


Make mecha and sexbots. 



Thu, 11/07/2013 - 15:24 | 4132040 LawsofPhysics
LawsofPhysics's picture

"Shift to hydrogen/alternative energies"- ah yes but, you still need an energy source to generate the hydrogen gas.  Hydrogen gas is not an energy source, but it certainly is a good energy currency (yes despite many popular myths, hydrogen gas can be stored and transported much safer than gasoline).

Thu, 11/07/2013 - 15:16 | 4132015 q99x2
q99x2's picture

I demand fhat they (and the FED) are let to fail and the people of the world get their retribution. China gets to nuke them. Russia gets to nuke them. India gets to throw sand on them and Brazil gets to throw them into a lake filled with piranha.

Thu, 11/07/2013 - 15:24 | 4132016 Mercury
Mercury's picture

In particular, these firms presumably exist, in large part, because there are scale or network effects that allow these firms to offer certain types of services that have value to their global clients. 

But the head of the New York Federal Reserve Bank can't name one.

He’s right of course but as Tyler said there is only one "scale effect" that matters and it rhymes with shmegmabatory rapture.

Thu, 11/07/2013 - 15:16 | 4132019 squid427
squid427's picture

these firms offer certain types of services that have value to their global clients.  These benefits might be lost or diminished if such firms were broken up.



advertizing insider trading and market manipulation to global clients

Thu, 11/07/2013 - 15:18 | 4132024 t0mmyBerg
t0mmyBerg's picture

Dudley POS.  All I can say is I hope he is in the wrong place at the wrong time along with Dear Leader and the rest of them.  So the taxpayer should be on the hook for them to unleash this benefit to large global clients and the implicit federal backing should allow them to gain monopolistic competitive advantage by resulting in lower funding costs .  The wrong place and wrong time cannot come quickly enough for PsOS like this

Thu, 11/07/2013 - 15:24 | 4132047 SillySalesmanQu...
SillySalesmanQuestion's picture

The Blue Horseshoe Casino needs to be foreclosed on, stripped of its assets, demolished, and the owners put away for the millions of frauds perpetuated upon the masses. They would have a choice of gulliotine blade, swinging from the lampost or being boiled like a frog.

Thu, 11/07/2013 - 15:25 | 4132050 shovelhead
shovelhead's picture

Dudley want you to enjoy your Stockholm Syndrome.

"Because people feel comforted by having a gun pointed at their head while their pockets are being emptied. They have grown accustomed to the certainty of the present situation."

This guy deserves a pickup ride with a chain on a gravel country road. Whee-haw.

Thu, 11/07/2013 - 15:34 | 4132086 The Fonz...befo...
The Fonz...before shark jump's picture

This guy deserves a pickup ride with a chain on a gravel country road. Whee-haw.


thats just the start...then you dump the body in a septic tank so the wounds get nice and infected...then we are onto something...

Thu, 11/07/2013 - 15:35 | 4132090 msnrochny
msnrochny's picture

How doess Dudley say all that with Jamie's cock in his mouth?

Thu, 11/07/2013 - 15:35 | 4132094 Cheater5
Cheater5's picture

No problem Bill.


Simply change the constitution to make it a treasonous act for any person associated with the Federal governement to bail out (or even suggest the bailout of) any financial institution (punishable by say ... death) and wait six months.  We'll see if there are really efficiencies there or, more likely, the market imposes a swift and brutal opacity discount to the shares that causes them to be broken up by the market.



Thu, 11/07/2013 - 15:36 | 4132095 Cheater5
Cheater5's picture


Thu, 11/07/2013 - 15:43 | 4132127 yogibear
yogibear's picture

Dudley has the most to loose if the too big to fail are broken up. 

Listening to the fed is like taking advice from the criminals best friends. They all have a common interest to concentrate power.

Thu, 11/07/2013 - 15:55 | 4132176 Rand Mises Hayek
Rand Mises Hayek's picture
  1. If the American people ever allow the banks to control issuance of their currency, first by inflation and then by deflation, the banks and corporations that grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied. — Thomas Jefferson
  2. Permit me to issue and control the money of the nation and I care not who makes its laws. — Mayer Amsched Rothchild

Thu, 11/07/2013 - 16:38 | 4132322 BigJim
BigJim's picture

The 'Jefferson' quote is probably misattributed.... doesn't make it any less true, however.

Thu, 11/07/2013 - 16:02 | 4132212 ptoemmes
ptoemmes's picture

But they in fact DO provide services that have value to thier global - only one - of which is campaign contributions to the politico that permit their kind to exist.


Why there was an example of this just the other day:

Thu, 11/07/2013 - 16:11 | 4132224 virgilcaine
virgilcaine's picture

Hopefully the Market will put them out of their misery.. for once and for all. Bernanke cannot hold back the forces of nature forever. Jail or Execute all those who repealed Glass steagel  and allowed this travesty to happen.

Thu, 11/07/2013 - 16:20 | 4132253 falak pema
falak pema's picture

He is right when he says " just breaking them up will not solve the systemic problem."

The systemic problem is part of the MINDSET, a consequence of which is the Supply side oligarchy financial cum outsource mantra, which confided the crown jewels of corporate profit and asset pumped nominal paper spike to the "best and brightest" financial cabal in charge of THAT bundle. Oh the great pastafarian festival  which is currently underway in FED QE printing to infinity, to elect the great noodle of all noodle-doodle lovers of sheeple consumerista faith in fiat dictat! Yellen forever!

We have to go back to roots causes : Incestuous FED shareholders, fractional reserve, fiat hegemony based on reserve oil alliance, and then...NWO structural imbalance all for the 1%.

That is hubris unlimited as this was a road to hell for anybody who had read history. We have accumulated all the signs of putting your eggs in one basket without any moral or material collateral apart from nuclear arsenal. And that is a non starter unless you are, as a power elite, totally DR Strangelove compatible.

Yes, don't  pull the plug on the TBTF  UNLESS you go to the roots of the system.

Now its first world with back to the wall, and if we remember what happened last time, the knee jerk for these impotent Oligarchs will be to open the gates to the barbarians by forgetting debt is not asset; aka destroy all that is essential for the ephemereal smell of transient comfort of "our way of life in not negotiable"...Indeed. 

Thu, 11/07/2013 - 16:22 | 4132264 logicalman
logicalman's picture

there are scale or network effects that allow these firms to offer certain types of services - AKA rigging EVERYTHING.

Thu, 11/07/2013 - 16:36 | 4132313 GoldenDonuts
GoldenDonuts's picture

The next bubble will be in guillotines, torches, tar, and pitchforks.

Thu, 11/07/2013 - 16:48 | 4132354 khakuda
khakuda's picture

How about this Bill?  You don't have to break them up, you could raise capital standards massively, forcing them to bring down leverage from 30 to 1 to 2 to 1.  They could still serve God that way, it would just be less profitable and less systemically risky.

Thu, 11/07/2013 - 16:59 | 4132393 f16hoser
f16hoser's picture

Not only "Break 'em up." let's hang these Bastards and Basterettes from the nearest light poles!

Thu, 11/07/2013 - 17:39 | 4132554 bozzy
bozzy's picture

Crane the bankers

Thu, 11/07/2013 - 18:26 | 4132737 theprofromdover
theprofromdover's picture

Not one of the 100 biggest companies in the world would suffer at all if you split them into 2, 3, 4. In fact most of these companies woud benefit from their new competition, and we would benefit from the reduced monopoly.

You could reduce the giant US banks down to two, and you would still need both of them to handle Facebook, Twitter, R-swipe's IPO.

Bill, if this is how your brain works, time to walk away, you've lost it pal.

Break 'em up, and jail the top ten layers of management for a start.

Thu, 11/07/2013 - 18:58 | 4132819 Ned Zeppelin
Ned Zeppelin's picture

These are the people Dudley serves.  This is what he says, imagine what he thinks.  He is doing a fantastic job for his employers. 

Thu, 11/07/2013 - 20:52 | 4133293 traditionalfunds
traditionalfunds's picture


Thu, 11/07/2013 - 22:03 | 4133524 williambanzai7
williambanzai7's picture

Global services such as: money laundering, FX fraud, derivatives hustling, and cash mismanagement. 

Thu, 11/07/2013 - 22:14 | 4133565 kedi
kedi's picture

Fuck em. Bust em down to gravel bits. And keep them there. This will force them to take advantage of the level of technical instant integration that we now have, to pool their resources when required, to offer any size of investment capital required from amongst them. Automatically spreading risk and forcing a level of cooperation and combined risk assesment from each. Risk being assesed against each other as participants to be able to front that capital as well. This will also keep them interested in serving the small end of the business. I think such a combined resource of capital would be very vibrant and resiliant. Almost, banks as crowd source.

Thu, 11/07/2013 - 22:19 | 4133584 kedi
kedi's picture

This would also quickly weed out the big shots at the top who skate by on the loopholes, crime, and CEO network. They would have to be quicker, smarter and turning a profit at every level under their stewardship. Investors looking to buy into banking stocks can have a broader range of options to choose from. Spreading their investment wider. Spreading risk.

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