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Why Buying Banks is a Horrible Idea

By freak80   Follow   Tue, 31 Jul 2012, 10:01am   417 views   3 comments
In Corning NY 14830   Watch (0)   Share   Quote   Permalink   Like   Dislike  

http://www.fool.com/investing/general/2012/07/30/why-buying-banks-is-a-horrible-idea.aspx?source=ihpsitth0000001

"What we need to do is to think about the root problem: Banks were incentivized to manipulate LIBOR. As it turns out, banks were incentivized to issue bad home loans. To take on extra market risk. To look the other way when money launderers came calling. So maybe the problem isn't just that bankers are greedy, but that the institution of banking is a place where being greedy is also heavily incentivized."

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1. Vicente Follow Befriend (8) 204 threads 4,411 comments Davis, CA

   1   9:43pm Tue 31 Jul 2012   Share   Quote   Permalink   Like (4)   Dislike   Massive banks combining proprietary trading, retail banking, and investing should be dismantled. Several hundred people should be prosecuted at a minimum. That none of this has or will take place, is the root problem.

2. freak80 Follow Befriend (4) 52 threads 4,416 comments Corning, NY Premium

   2   7:28am Wed 1 Aug 2012   Share   Quote   Permalink   Like   Dislike   Vicente says Massive banks combining proprietary trading, retail banking, and investing should be dismantled. Agree. It's too much systemic risk. Heck, fractional-reserve banking carries enough systemic risk as it is, even w/o risky short-term trading. We need Glass-Stegall back! It worked for 70 years. But then we thought we were smarter and didn't need it anymore.

3. thunderlips11 Follow Befriend (13) 52 threads 2,638 comments Premium

   3   9:15am Wed 1 Aug 2012   Share   Quote   Permalink   Like (1)   Dislike   freak80 says We need Glass-Stegall back! It worked for 70 years. But then we thought we were smarter and didn't need it anymore. Yeah, it got in the way of "financial innovation".