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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: Jim McMannis who wrote (123347)	10/10/2012 5:22:05 PM
From: RetiredNow	1 Recommendation Respond to of 149317

That's true. That's the danger of the government being involved in choosing which banks are systemic risks. The preferred market solution is to simply let the bank fail. However, to move in that direction we need hard and fast laws that prevent any bank from getting too big and from engaging in risky behavior with depositor's money. The reason why the gov't had to step in during the recent crisis is because we no longer had those laws in place to prevent banks from becoming systemic risks. Bush let Lehman fail and look what happened. So my solution is three fold: 1) in the short run, identify the systemic risks banks and force them to sell off the trading desks, derivatives portfolios, and other portions of the business that create systemic uninsurable risk. 2) in the medium term, bring back Glass Steagall and create new laws that put limits on the size of banks so that they cannot grow into systemic risks, 3) in the long run, let the free market take care of any future banks that get into trouble....meaning if they are found to be insolvent, then by law they should be forced into bankruptcy and an orderly wind down of the balance sheet.