Last month, the Bank of America was one of the few big Wall Street banks with enough capital on its books to pass the Fed’s “stress test” – theoretically able to survive the next major economic downturn. But today Bank of America announced its accountants had made a mistake and it’s actually $2.7 billion short of what it submitted to the Fed. In reality, the Fed’s “stress tests” are meaningless because it’s impossible know with any certainly how much capital a big bank has. Which is why the next big downturn will require another massive taxpayer bailout for Wall Street unless the big banks (which are much larger than they were before the last crisis) are trimmed down to a size where none of them is too big to fail. The fact that – six years after the near meltdown of Wall Street -- neither Republicans nor Democrats have yet moved to cap the size of big Wall Street banks is evidence the banks are also too politically powerful to fail. This should be a major issue in the 2016 presidential election.
Posted on: Tue, 30 Sep 2014 16:50:09 +0000
Trending Topics
Recently Viewed Topics
© 2015