Monday, November 18, 2013
Elizabeth Warren Slams Regulators for Keeping Banks "Too Big to Fail"
http://www.motherjones.com/politics/2013/11/elizabeth-warren-dodd-frank-too-big-fail-speech-regulators. Due 25 November 2013 at 6am. What is "Too Big To Fail?" Why is Elizabeth Warren concerned about it? How does she propose reducing the size of banks? What do YOU think should be done??
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This article is about the Dodd-Frank Wall Street Reform and Consumer Protection Act, and how it has failed to fulfil its promises regarding banks and the rules of it. The idea of "Too Big To Fail" is stating that if big financial institutions were to fail, the government would have to step in and help them out to prevent a big economic disaster. Elizabeth Warren is worried that federal regulators are not meeting deadlines to write rules regulating banks, she is also worried that if no action is taken, these events could cause an economic collapse. She is proposing bringing back the Glass-Steagall Act which would provide stability to the bank, even in hard economic times. In my opinion, the government should help out with the problems in the bank so that the whole nation doesn't have to suffer if it is bound to fail.
ReplyDelete'Too big to fail"— the idea that certain financial institutions are so central to the operation of the economy that if, like AIG in 2008, their balance sheets collapse, the US government must step in to keep them solvent and prevent a system-wide collapse. According to Warren, the problem has actually gotten worse since the recession began. Bank consolidation is even more pronounced five years post-crash. But in the end, technical fixes from the federal regulators aren't going to be enough to solve the problem. I think the biggest banks need to be smaller and less complex.
ReplyDelete"Too Big to Fail" represents the idea that financial institutions in the United States are so large and central to the economy that they cannot fail. According to Warren, she is concerned that, "the problem has actually gotten worse since the recession began. Bank consolidation is even more pronounced five years post-crash. Today, the four biggest banks are 30 percent larger than they were five years ago, and the five largest banks now hold more than half of the total banking assets in the country." Warren, to help solve this issue, pushed the 21st Century Glass-Steagall Act, "that would force commercial financial institutions to wall off standard bank deposits from the riskier activities of investment banking, such as the swaps that sunk the economy in '08." In my opinion, I think the 21st Century Glass-Steagall Act should be imposed to the fullest extent of the law. I do not think any other laws should be passed to hinder it in any way so that the bank's power can be reduced.
ReplyDelete-Anita Pizzirani (Pizza)
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ReplyDeleteThe phrase of “Too Big to Final” is that some of the institutions in the United States are central to the economy and that if they happen to fail, the government might have to come in and save them because if they do fail it will cause a huge economic disaster. Warren believes that since the recession, the issue has actually escalated and became worse. The regulators are not meeting their deadlines for making new rules for these banks and proposed if no action is being taken the economy is on bound to collapse eventually. To help reduce the size of the banks, she has passed the 21st Century Glass-Steagall Act, which in return would bring more stability to the banks even in economic hardships. I believe that the government should the help the banks more because if the banks fail the economy will suffer for it.
ReplyDelete"Too Big To Fail" is the notion that the financial institutions vital to our economy's survival must receive aid from the U.S. government when they fail to stand on their own, so that the entire economic system does not collapse along with it. Warren is concerned about the efficiency of this concept due to the recent failure of Congress to step in when regulators failed to implement effective rules for banks to abide by. Warren stated that "the problem has actually gotten worse since the recession began," also mentioning that bank consolidation has only expanded over the past 5 years. In solving this issue, Warren proposes the 21st centurry Glass-Steagall Act, which would eliminate any risky businesses that banks partake in now. It would make banks more "boring," but more importantly, it would make them smaller, therefore making them easier to manage. At this point in time, I believe that it would be futile to enforce something like the Glass-Steagall Act; the banks practically own the Congress and President, and trying to pass such a law would simply result in a waste of time and failure. Something needs to be done, yes, but the solutions proposed in the article are not the way to go.
ReplyDeleteFirst of all, banks failure is never acceptable. If the banks, like Bank of America, are starting to go downhill, government must have to step in and help them out. "Too big too fail" indicates that banks like Bank of America is tied to the economy of America. Warren is worried that government isn't doing its job to pass effective rules to help the banks. According to Warren, she said that the new Glass-Steagall Act would attack both 'too big' and 'to fail. I think this is useless simply because banks are already too big so it is tough to implement anything now.
ReplyDelete"Too big to fail" is the idea that basically these banks own so much of the country's assets that they will not fail. The government will not allow them to fail because if they do, it would cause a nationwide collapse. The government takes extra precautions and measures to protect the banks. Warren is concerned that the regulators aren't taking their deadlines seriously and as a result not addressing and fulfilling the "too big to fail" notion, in which government takes precautions to prevent banks from collapsing. She proposes a new 21st century Glass-SteagallAct to be enforced that will fulfill the notion of "Too big to fail." It would reduce collapses by protecting deposits and providing stability while also making banks a little bit smaller so that they are more manageable. I think the first mistake was allowing the banks to get as big as they are today, at this point they have so much control and act as if they are invincible. I think the solution involves breaking down these big banks and preventing them from becoming "too big" that way if one does collapse it doesn't have a nationwide affect. The problem would be whether or not the regulators would write the rules in time for deadlines to enforce this.
ReplyDelete"Too big to fail" is the label given to certain financial institutes that have so much control over the economy, their failure would severely hurt many citizens financially. When banks like these begin to fail, the government is forced to bail them out to protect the middle class americans that would take the majority of the financial damage. Bank of America and AIG are among some of the banks that are given this label. This concerns Warren because the banks that are fall into this category are preventing the growth and safety of the economy and especially the middle class. She claims that there has yet to be an act or reform that covers "too big" and "to fail." Both the Dodd-Frank Wall Street Reform and Consumer Protection Act have failed to solve much of anything. Elizabeth Warren is especially worried that the federal regulators aren't making deadlines and no one has said anything about it. To shrink the size of banks and increase consumer financial safety, Warren has proposed bringing back the Glass-Steagall Act. This would stop banks from continuing the same risky actions that caused the crash in 2008. In my opinion, I think a whole new Act should be created with very strict guidelines and heavy fines for violations. I think this act should mandate a split between investment banks and savings banks. The years of greed found in these corporate big-wigs needs to be ended and this can be done by heavy fines for anything that doesn't benefit the economy as a whole.
ReplyDelete“Too Big To Fail” is the idea that some financial institutions are so focused on the operation of the economy that if their balance sheets collapse, the US government has to step in to keep them solvent and prevent a system-wide collapse. Elizabeth Warren is concerned about Too Big To Fail because she believes the situation with big banks have actually gotten worse. She says that “the four biggest banks are 30 percent larger than they were five years ago,” Warren proposes to reduce the size of banks by pushing the 21st Century Glass-Steagall Act. She claims it would “reduce failures of big banks,” I think the government should intervene and do something about it, because the big banks will just continue to grow the way they’re growing.
ReplyDeleteThe colloquial term "too big to fail" is an economic theory that maintains the idea that specific financial organizations, like A.I.G., Enron, and GM, become so large, so important to the country’s economy that the government, in order to prevent the businesses’ failure, will provide some sort of assistance.
ReplyDeleteWarren remains highly skeptical, stating that the Dodd-Frank Wall Street Reform and Consumer Protection Act efficiency isn’t solving the problem. Her concerns are perfectly justified as just recently Congress has once again has failed to step in when regulators failed to implement effective rules and regulations for banks to follow.
Warren has proposed the 21st Century Glass-Steagall Act, which would reduce any risks and in return bring more stability to the banks even in times economic distress.
In all honesty, I believe it would be practically pointless to enforce something like the Glass-Steagall Act. The banks have so much power, and they pretty much own Congress.
"Too big to fail" is the idea that certain financial institutions are so central to the operation of the economy that if, like AIG in 2008, their balance sheets collapse, the US government must step in to keep them solvent and prevent a system-wide collapse. Elizabeth Warren is worried because she thinks that the situation has gotten worse. She is proposing that they bring back the Glass-Steagall Act. This act would help provide stability to the bank. I think that the government should step in due to the fact that the banks will continue to grow more powerful.
ReplyDeleteToo Big To Fail is basically the idea that certain financial institutions are so central to the operation of the economy that if their balance sheets collapse, says Motherjones, the US government must step in to keep them solvent and prevent a system-wide collapse. Elizabeth is concerned about Too Big To Fail because deadlines aren't being met and agencies are failing to keep the schedule laid out. She proposes The new Glass-Steagall Act so that it could attack the sizes of banks, I agree with Elizabeth's proposal to reintroduce the Glass-Steagall Act.
ReplyDelete"Too Big to Fail" means that a company is so large that the national economy is dependent on the success of that company. This means that the United States has to do everything in it's power to keep these companies running, and that these companies can do whatever they want with the knowledge that the U.S. will have to chose between bailing them out or facing an economic collapse whenever they begin to fail. The entire notion of too big to fail threatens the premise of capitalism by eliminating competition. Warren wants to reinstate the Glass-Steagall Act to separate commercial and investment banks, which would prevent "Too Big To Fail" banks from betting the U.S. economy on the stock market. While this is the most politically acceptable fix, I think that an ideal economy would make use of a government-run commercial bank and then private investment bank. That is the best way to keep commercial banks honest and remove the incentive for dishonesty in the banking industry.
ReplyDelete"Too Big to Fail" is, more or less, the concept that those financial institutions with considerable influence on the national economy must receive government bail when they begin to fail. Warren is concerned about the notion of continuously saving the big banks, because these setbacks are preventing the growth and safety of the economy, especially the middle class. She proposes a 21st century Glass-Steagall Act to be enforced that would fulfill the "Too Big to Fail" notion. I feel that this act would be a good start to better regulation of banks, but it would depend largely on how strictly the deadlines are set for these big banks.
ReplyDelete"too big to fail"— the idea that certain financial institutions are so central to the operation of the economy. Elizabeth Warren is concerned about it because it stipends the economy when the continuously are receiving bailouts for their failure in the system. She brings into the concept of the 21st century glass stegal act. I agree that the new act is the better way to go because it will make banking less risky like it used to be before the act was repealed.
ReplyDeleteToo big to fail" represents the idea that financial institutions in the United States are so large and central to the economy that they cannot fail. Elizabeth Warren day's the deal with big banks have gotten worse, the four biggest banks are 30% larger than they were five years ago.
ReplyDeleteWarren has proposed the 21st century Glass-Steagall act which would reduce any risks and in return bring more stability to the banks even in times of economic distress
I think putting this act into play well be a good start in putting these larger banks into place, and to prevent a monopoly from happening.
-Jezire Maldonado
The idea of "Too big to fail" refers to some of the biggest banks that own large amounts of our countries assets, and when they get into trouble and start "failing", they expect the government to come in and bail them out. Elizabeth Warren is concerned about it because she doesn't think it is fair that these banks expect to get bailed out for things they could have prevented if they had done what they were supposed to do, while working Americans struggle. She proposes the 21st Century Glass-Steagall Act to reduce the size of the banks. In my opinion I think there should be certain penalties that take place on the people who are not meeting the deadlines when writing the rules for bank regulation. I also think there should be more smaller banks that hold the nation's assets instead of a few giant ones.
ReplyDelete“Too Big to Fail” implies that an institution is so important to the economy that the government would intervene on their behalf to keep them running in order to not collapse the economy. This is alarming because this gives the big companies free reign over our economy. For example, the large banks can make lots of risky investments with the guarantee that the government has no choice but to bail them out if need be. Warren aims to reduce the power and size of banks by pushing for the reinstatement of the Glass-Steagall Act, which separates investment banks from commercial banks. That would mean that the banks can’t make risky gambles with people’s money anymore. I think this is a good idea because it would bring stability and reliability to the banks, allowing people to safely entrust their money to them.
ReplyDeleteThe idea of “Too Big To Fail” is that even if large financial institutions crucial for the public were to be unfortunate monetarily, that the government would have to step in to prevent a downfall. Warren fears that the regulators fail to meet deadlines as they write rules to regulate banks, and that inaction could result in economic collapses. Warren has proposed a comeback of the Glass-Stragall Act, in order to provide a more secure system, leaving little room for the risky business that banks are getting into, while making them smaller. I am in the opinion that this is a “cute” article. The naïveté is clear—despite any efforts by the public, it is unlikely that big banks will want to do something that may get in the way of their money. I think however, that is this were done properly, it could be a great success for all parties involved.
ReplyDelete"too big to fail" is the idea that certain financial institutions are so central to the operation of the economy. failure is heavily detrimental and never acceptabe. If the banks are starting to go downhill, the government must step in and help them out. "Too big too fail" indicates that banks are tied to the economy of America. Warren is worried that government isn't doing its job to pass effective rules to help the banks. According to Warren, she said that the new Glass-Steagall Act would attack both 'too big' and 'to fail. I think this is useless because banks are already too big and have so much power that it is tough to implement anything now, and implementation would be slow and likely ineffective.
ReplyDeleteThe idea of “too big to fail” is that some financial institutions are so large and central to the economy that if they were to fail, the government would have to step in and take action. The government would have to provide aid or funding to these institutions in order to prevent the economy from collapsing. Elizabeth Warren is concerned about this idea because she thinks that the economy may collapse soon if action is not taken. Congress has recently failed to step in and effectively regulate banks operating in the economy. In order to reduce the sizes of the banks, she proposed the 21st century Glass-Steagall Act which would stop banks from partaking in risky business. I think that this act is a good start for regulating these large banks, but it is the governments job to ensure that this act is being enforced.
ReplyDeleteThe meaning behind "too big to fail" is that some financial institutions have so much power regarding the economy that were they to fail, there would need to be government action to save it. The government would need to give money to these institutions to keep them from collapsing and taking down the economy with them. Warren is worried that the government hasn't been doing enough to help these "too big to fail" institutions. Because of this, she proposed the Glass-Steagall Act, which would separate banks and their ability to invest your money, which they are notoriously bad at. I believe that this act is a great idea, as it has worked in the 20th century, however, I think that in order for it to be successful, the government would need to be on board with the plan.
ReplyDelete