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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (369641)	6/21/2010 7:12:49 AM
From: Ish	Read Replies (1) \| Respond to of 793912

<<I get free checking here with direct deposit of my SS check.>> Can you do that at the bank or do you have to go to the SS office?

To: LindyBill who wrote (369641)	6/21/2010 12:04:28 PM
From: KLP	Respond to of 793912

Bank charges UP because: WSJ: Banks' Derivatives Nightmare Isn't Scary After All JUNE 19, 2010 By DAVID REILLY Good riddance. That is one possible answer to bankers' claims that a move to curb derivatives activities will push business into the arms of foreign banks. The protests are coming as negotiations over financial-overhaul legislation near completion, possibly in the coming week. What still worries banks is a proposal by Sen. Blanche Lincoln to force derivatives activity into separately capitalized affiliates within banks. Even if U.S. banks lose business to European rivals, any slimming of derivatives risk within big U.S. banks could benefit taxpayers and the financial system. After all, the concentration of derivatives in big U.S. banks, and the interconnections they bred between institutions, was a major reason behind the government bailout of the financial system. "If you have a very dangerous activity in your country, you should be happy to see it go," said MIT economist Simon Johnson. And since Europe would likely do something similar, "You would achieve a global outcome with a big first-mover advantage to the U.S." What is more, investors have previously heard dire warnings from the financial industry that regulation will send business overseas. Before the crisis, there were calls for the U.S. to emulate the U.K.'s light-touch regulatory approach lest Wall Street suffer. It turns out Wall Street needed more regulation, and the U.K. has disavowed the light-touch approach. Currently, J.P. Morgan Chase, Citigroup, Goldman Sachs, Morgan Stanley and Bank of America hold 96% of $293 trillion in derivatives held by the top 25 bank holding companies, according to the Office of the Comptroller of the Currency. But the impact of derivatives curbs mighn't be as bad as big banks prophesize, especially since Sen. Lincoln this past week further clarified her proposal. She has made clear it won't ban banks from using derivatives or from hedging against their own risk coming from, say, making mortgages. Nor would it curtail their ability to write derivatives for banking clients. Rather it will affect derivatives used for trading and dealing purposes. True, banks will have to put these activities into affiliates. And raising capital for those units could prove costly. But that only underscores that banks don't necessarily hold enough capital for this business today, and counterparties also don't because they believe the government will rescue big banks. This means taxpayers subsidize banks' lucrative derivatives businesses. Instead, as Thomas Hoenig, president of the Federal Reserve Bank of Kansas City wrote in a recent letter to Sen. Lincoln, derivatives activities "should be placed in a separate entity that does not have access to government backstops." Just because Europe continues to subsidize banks' derivatives business isn't an argument for the U.S. to follow suit. — David Reilly