questionmark Posted November 15, 2012 #1 Share Posted November 15, 2012 Beyond the banking world, a parallel universe of shadow banks has grown in the form of hedge funds and money market funds. They're outside the reach of conventional financial regulation, prompting authorities to plan introducing new rules to prevent the obscure sector from triggering a new financial crisis. But in doing so they risk drying up an important source of funding to banks and firms. In the financial world, there is a narrow divide between heaven and hell. Frenchman Loïc Féry realized this when he was 33. He was a rising star in the banking world, managing the trade in complex loan packages for an investment bank. According to his business card, he was the bank's "global head of credit markets." But then one of his employees gambled away about €250 million ($317 million), and suddenly Féry was without a job. That was in 2007. A number of investment bankers experienced a similarly precipitous fall in the turbulent years of the financial crisis. But, like Féry, many reappeared before long and became more successful than ever, in the world of the so-called shadow banks. These are companies that engage in business similar to that of ordinary banks, but without being subject to the same strict regulation. Read more Link to comment Share on other sites More sharing options...
+joc Posted November 15, 2012 #2 Share Posted November 15, 2012 (edited) Beyond the banking world, a parallel universe of shadow banks has grown in the form of hedge funds and money market funds. They're outside the reach of conventional financial regulation, prompting authorities to plan introducing new rules to prevent the obscure sector from triggering a new financial crisis. But in doing so they risk drying up an important source of funding to banks and firms. Authorities = Federal Government. So...does it make any sense at all for the Fed to 'stimulate' the economy by graciously giving billions of dollars of our taxes to Banks...and then to dry up the ability for banks to create wealth at the same time? No it doesn't. That's why you have banking entities like that to begin with...who created them?...the banking industry...why? Because they are so over-regulated by the Fed in the first place. Everytime the stinking Fed puts it's nose in our business it screws everything up. Edited November 15, 2012 by joc Link to comment Share on other sites More sharing options...
EllJay Posted November 15, 2012 #3 Share Posted November 15, 2012 How Shadow Banks Rule the World Have a look at this one - a quite long but thorough presentation of how it all came about. [media=]http://www.youtube.com/watch?v=HfpO-WBz_mw[/media] Link to comment Share on other sites More sharing options...
aztek Posted November 15, 2012 #4 Share Posted November 15, 2012 no news here Link to comment Share on other sites More sharing options...
lightly Posted November 16, 2012 #5 Share Posted November 16, 2012 (edited) Wasn't it deregulation which allowed lending banks to become investment banks? ...Which caused the current banking crisis? ..and spawned the housing/real estate bubble burst and so on? I don't trust the FED but banks should be regulated . Edited November 16, 2012 by lightly 3 Link to comment Share on other sites More sharing options...
questionmark Posted November 16, 2012 Author #6 Share Posted November 16, 2012 (edited) Wasn't it deregulation which allowed lending banks to become investment banks? ...Which caused the current banking crisis? ..and spawned the housing/real estate bubble burst and so on? I don't trust the FED but banks should be regulated . ehm, yes. But it had an history. When it was discovered that the collusion between investment, savings and lending aided the big depression in the 20s a certain Mr. Glass and a Mr. Stegall decided to bring an act to Congress that separated bank activities (among a few other regulations). And that worked quite well for about 50 year.s Until a bunch of brilliant politicians in search of money for their campaigns decided to abolish the Glass Stegall act partially. And guess what? It led to Depression Reloaded. Which is what we have right now. Edited November 16, 2012 by questionmark 3 Link to comment Share on other sites More sharing options...
+joc Posted November 18, 2012 #7 Share Posted November 18, 2012 Wasn't it deregulation which allowed lending banks to become investment banks? ...Which caused the current banking crisis? ..and spawned the housing/real estate bubble burst and so on? I don't trust the FED but banks should be regulated . There is a thread that explains exactly this. Beginning at about Post #32 you can read where I schooled Tiggs on the subject! LINK Link to comment Share on other sites More sharing options...
acidhead Posted November 18, 2012 #8 Share Posted November 18, 2012 duh Link to comment Share on other sites More sharing options...
+joc Posted November 18, 2012 #9 Share Posted November 18, 2012 duh duh Link to comment Share on other sites More sharing options...
lightly Posted November 19, 2012 #10 Share Posted November 19, 2012 (edited) duhhh ... i don't understand all the ins and outs [thanks joc] ... bottom line is.. lending banks should not be allowed to sell their risk . It seems to cause serious problems when they do. as for shadow banks.. why is it that brand new central banks were the first thing that happened in Afghanistan, Iraq and Libya when 'TROUBLE' occurred? Edited November 19, 2012 by lightly Link to comment Share on other sites More sharing options...
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