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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhat does the Vice Chair of the FDIC think of the Citigroup rider in Cromnibus?
"illogical"Hoenig is now the vice chairman of the FDIC. Hes the former president of the Federal Reserve Bank of Kansas City, and was considered one of the more conservative members of the Fed.
And he isnt happy at all with the effort from Yoder and others to repeal the Dodd-Frank ban on federally-insured banks using swaps.
It is illogical to repeal the ... push out requirement, Hoenig said in a recent statement.
The spending bill does just that.
Here are more excerpts from Hoenigs statement of Dec. 10:
In 2008 we learned the economic consequences of conducting derivatives trading in taxpayer-insured banks. Section 716 of the Dodd-Frank Act is an important step in pushing the trading activity out to where it should be conducted: in the open market, outside of taxpayer-backed commercial banks. It is illogical to repeal the 716 push out requirement...
While the requirement applies to only about 5 percent of the notional amount of derivatives, that 5 percent represents more than $14 trillion and covers those derivatives where the greatest risk lies uncleared credit default swaps (CDS), equity derivatives and commodity derivatives.
This $14 trillion exposure represents about 83 percent of US gross domestic product. That total exposure is held mainly in three commercial banks.
To put it in perspective, $4.6 trillion in CDS notional exposure is three times the amount that AIG had when it was bailed out at a cost of $85 billion. After its failure, AIG unwound over 35,000 CDS trades with a notional value exceeding $1.6 trillion.
http://www.kansascity.com/news/local/news-columns-blogs/the-buzz/article4634670.html
And he isnt happy at all with the effort from Yoder and others to repeal the Dodd-Frank ban on federally-insured banks using swaps.
It is illogical to repeal the ... push out requirement, Hoenig said in a recent statement.
The spending bill does just that.
Here are more excerpts from Hoenigs statement of Dec. 10:
In 2008 we learned the economic consequences of conducting derivatives trading in taxpayer-insured banks. Section 716 of the Dodd-Frank Act is an important step in pushing the trading activity out to where it should be conducted: in the open market, outside of taxpayer-backed commercial banks. It is illogical to repeal the 716 push out requirement...
While the requirement applies to only about 5 percent of the notional amount of derivatives, that 5 percent represents more than $14 trillion and covers those derivatives where the greatest risk lies uncleared credit default swaps (CDS), equity derivatives and commodity derivatives.
This $14 trillion exposure represents about 83 percent of US gross domestic product. That total exposure is held mainly in three commercial banks.
To put it in perspective, $4.6 trillion in CDS notional exposure is three times the amount that AIG had when it was bailed out at a cost of $85 billion. After its failure, AIG unwound over 35,000 CDS trades with a notional value exceeding $1.6 trillion.
http://www.kansascity.com/news/local/news-columns-blogs/the-buzz/article4634670.html
Also see~
Reversal of Dodd-Frank swaps rule ignores lessons from financial crisis, London whale
11/18/14
http://blogs.reuters.com/financial-regulatory-forum/2014/12/18/reversal-of-dodd-frank-swaps-rule-ignores-lessons-from-financial-crisis-london-whale/
So our congress is risking an amount equal to 83% of our GDP, held by only 3 banks.
Stopping this would have been worth a temporary govt shutdown. What they've done is criminal.
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What does the Vice Chair of the FDIC think of the Citigroup rider in Cromnibus? (Original Post)
RiverLover
Dec 2014
OP
djean111
(14,255 posts)1. Oh, but Obama and - more importantly, IMO - Jamie Dimon wanted to do this so much that they
personally called the pet Blue Dogs.
Oilwellian
(12,647 posts)3. But hey, Obama had a fantastic month! n/t
Nuclear Unicorn
(19,497 posts)4. Excuse me but
you misspelled, "Romney bus."
RiverLover
(7,830 posts)5. LOL!
You spelling nazis...I stand corrected.
Doctor_J
(36,392 posts)6. Cuba!
stop complaining about the president and the rest of the dc dems giving billions to Citibank! Instead you must cheer them opening Cuba to Walmart and Koch Industries!