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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Chispas who wrote (104584)8/23/2009 11:23:37 AM
From: Elroy Jetson3 Recommendations  Read Replies (1) of 110194
 
This is the real cause of the current "banking crisis". A complete break down in banking regulation. Essentially fraud.

In many nations around the world, such as Australia, banks aren't allowed to value their assets at their own discretion.

When their assets fall below regulatory standards they get 90 day to fix the problem by selling assets or raising capital. If they don't meet the deadline they get sold off to another bank or investment group for little or nothing to their shareholders. No big taxpayer bailout required.

Allowing Citibank to run for years with only 1.5% regulatory capital was indefensible. Now they're a crippled ward of the state.
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