Using a secret enforcement tool, federal regulators in 2005 tried to limit the growth of Vineyard Bank, which was making commercial real estate loans in Southern California at almost double the rate of its peers.
There may be no government action more universally reviled in the U.S. than bank bailouts. Republicans and Democrats, financial industry lobbyists and watchdogs, Wall Street executives and President Barack Obama say taxpayers should never again rescue a failing bank.
As markets convulsed in September 2008, Morgan Stanley Treasurer David Wong briefed the Federal Reserve on a “dark” scenario in which the U.S. firm would need at least $10 billion of emergency loans from the central bank.
The finance industry’s lobbyists have publicly challenged our estimate that the largest U.S. banks receive an annual taxpayer subsidy worth $83 billion. We’re glad for the discussion. Understanding this issue is central to fixing the global financial system.
The world’s largest banks and investment firms should undergo quarterly stress tests to identify risks that could sink the financial system, according to a proposal by Stanford University finance professor Darrell Duffie .