A Quote by Abdul Aziz Al Ghurair
I think the market should reward banks that have been transparent in recognising their problems. I think the tendency of banks to hide the problem assets over a period of three or four years should not be allowed.
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Remember that banks aren't markets. The market is amoral. The market doesn't care who you are. You're a trade to the market. The market will sell you if they think you're riskier. Banks didn't do that
Economically, ISIS is making money every day on the black market with their oil fields. But they are also putting money in banks. We know where those banks are. We should go after the banks and the facilitators using them.
Banks don't want certain asset classes, and that's created opportunities for private equity, hedge funds, Silicon Valley. In this case I think he was referring to some of the European banks shedding assets, and the big buyers are probably not going to be big American banks. Someone like Blackstone may have a very good chance to buy those assets, leverage them, borrow up a little bit, and do something good there.
Should we think about separating the investment banks from the commercial banks, a new Glass-Steagall? I would be really excited to see that. I think it would be great for the economy.
We need the government to force the banks to write down all their bad assets now and then recapitalize themselves, preferably with private capital. Those banks that cannot raise sufficient capital should be seized and their deposits sold off.
The investment banks should either choose to be regulated as banks or should arrange to conduct their affairs to not require the stop-gap support of the Federal Reserve.
I think that some of today's focus on freedom of information and trans rights have a tendency to focus on the actions of individuals and how they should be regulated by governments. However, I think it's important to remember that it is the institutions themselves - schools, tax collection services, banks, human resources decisions, health departments, police departments, prosecutors, courts, and prisons - where the most devastating and systemic problems occur today. The scale of these problems is simply unimaginable.
I mean, everyone agrees with stress tests for banks. I mean that's clear. But banks should do that on their own. And they should worry about their own capital functioning. That's what they should do. It shouldn't be a government function.
The financial crisis was linked to the fact that banks had excessive leverage and too many risky assets. The solution is not to try to dictate to banks what they can do or not do, but to require them to strengthen their capital to absorb potential losses and hold less risky assets.
What should really be happening is a revolution. The system should be torn apart by the people and banks shouldn't be allowed to do what they do, and giant corporations shouldn't be allowed to run the world to the ground the way they're doing. But that's not happening for whatever reason.
The Central Bank should have a permanent window for discounting high quality securities where banks could go and discount these. It gives peace of mind to the banks. In the absence of this facility, what banks tend to do is to keep a liquidity cushion for emergency requirements. This is a very expensive way of managing liquidity.
I passionately disagreed with Treasury Secretary Hank Paulson's plan to bail out the banks by using a public fund called the Troubled Asset Relief Program (TARP) to help banks take toxic assets off their balance sheets. I argued that it would be much better to put the money where the hole was and replenish the equity of the banks themselves.
Remember that banks aren't markets. The market is amoral. The market doesn't care who you are. You're a trade to the market. The market will sell you if they think you're riskier.
There's only one thing that all of the central banks control and that is the base, their own liability, and they can control that in various ways. They can control it directly by open market operations, buying and selling government securities or other assets, for example, buying and selling gold, or they can control it indirectly by altering the rate at which banks lend to one another.
I think Roosevelt had four terms, didn't he? I think we should go back to that, and we should go back to four years for a senator, four years for a congressman, and I think we'd see a huge change in our society.
It does not stand to give banks millions of dollars at an interest rate of one percent, when banks charge students an interest rate of 6 percent. Why should the banks be scalping students?
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