Britain To Break Up Biggest Banks

Mon, 11/02/2009 - 06:46 EDT - Baseline Scenario - The Blog

The WSJ reports (on-line): “The U.K.’s top treasury official Sunday said the government is starting a process to rebuild the country’s banking system, likely pressing major divestments from institutions and trying to attract new retail banks to the market.” The British style is typically understated and policymakers always like to play down radical departures, but this is huge news.
Pressure from the EU has apparently had major impact – worries about unfair competition through subsidizing “too big to fail” banks are very real within the European market place. Also, strong voices from within the Bank of England have helped to move the consensus.
The US position on protecting everything about our largest banks is starting to look increasingly isolated and out of step with best practice in other industrialized countries. Time to start planning for the break-up of Citigroup.
By Simon Johnson

Original article
Login or register to post comments

Battle Of The Banking Policy Heavyweights
By Simon Johnson Just when it seemed that the debate over banking was winding down – with overwhelming victories on almost all dimensions for the people who run the world’s largest cross-border financial institutions – two of the biggest name policy heavyweights have entered the arena. Both voices are typically listened to most carefully within official circles and yet their messages today are diametrically opposed. Which one is right?
Too Big To Fail Remains Very Real
By Simon Johnson Prominent voices within the financial sector are increasingly insisting on one point: We have ended “too big to fail.” The idea is simple: through a combination of legislation (the Dodd-Frank legislation of 2010) and supportive regulation (particularly regarding how big banks would be handled in the event of “liquidation”), very large financial institutions are no longer perceived by investors to be too big to fail.
Simon Johnson’s TARP Testimony
I recommend reading in full Simon Johnson’s congressional testimony on TARP from about ten days ago. It starts with some Real Talk for bailout haters:
The Financial Stability Oversight Council Defers To Big Banks
By Simon Johnson
Kevin Warsh: “No Firm Should Be Too Big To Fail”
The debate over Ben Bernanke’s reappointment, and his approach to the financial system, may after all have had some impact. In a speech yesterday, Kevin Warsh – the Federal Reserve Board Governor who liaises between Ben Bernanke and financial markets – signaled a major change in Fed thinking regarding “too big to fail”.
The Banking Emperor Has No Clothes
By Simon Johnson
“A Healthy Financial System Cannot Be Built On The Expectation Of Bailouts”
By Simon Johnson. Testimony submitted to the Congressional Oversight Panel, “Hearing on the TARP’s Impact on Financial Stability,” Friday, March 4, 2011. I. Summary
Why Is The US Taxpayer Subsidizing Facebook – And The Next Bubble?
By Simon Johnson Goldman Sachs is investing $450 million of its own money in Facebook, at a valuation that implies the social networking company is now worth $50 billion. Goldman is also apparently launching a fund that will bring its own high net worth clients in as investors for Facebook.
Market Predictions for 2011
Michael Shulman submits: Everyone has written a forecast. In the spirit of starting the new year modestly, the other guys pretty much have it wrong, basing their projections on a month of data, perhaps three months and not underlying trends. My thoughts on 2011:
The SAFE Banking Act: Break Them Up
By Simon Johnson, co-author of 13 Bankers. On Wednesday, Senators Sherrod Brown and Ted Kaufman unveiled a “SAFE banking Act” with a clear and powerful purpose: Break up the big banks.

Main menu

Secondary menu

Britain To Break Up Biggest Banks

Related

Latest

User login

Our Blog

Markets Map

Follow Us

Secondary menu