Unrealized Bank Loss Are the 'Systemic Risk'

Federal officials, including the Secretary of the Treasury, the Chair and Vice Chair of the Federal Reserve Board and the Chairman of the FDIC, continually tell us that the banking system is well capitalized and secure. Meanwhile, federal banking regulatory agencies are simultaneously promoting new complex and costly regulatory capital rules that will significantly increase minimum bank risk-based capital requirements. The Financial Stability Oversight Council, a group headed by the Secretary of the Treasury with voting members from every important federal financial regulator, has also declared climate change and, more recently, non-bank financial institutions that are not regulated by FSOC member agencies, as sources of financial sector “systemic risk” that must be brought to heel by an FSOC member agency to prevent the next financial Armageddon.  Read Full Article »

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