Banking Essays - Systemic Risk, Bank Regulation In The United States

Banking Essays - Systemic Risk, Bank Regulation In The United States Banking Banking So Much for That Plan More than 70% of commercial bank assets are held by organizations that are supervised by at least two federal agencies; almost half attract the attention of three or four. Banks devote on average about 14% of their non-interest expense to complying with rules (Anonymous 88). A fool can see that government waste has struck again. This tangled mess of regulation, among other things, increases costs and diffuses accountability for policy actions gone awry. The most effective remedy to correct this problem would be to consolidate most of the supervisory responsibilities of the regulatory agencies into one agency. This would reduce costs to both the government and the banks, and would allow the parts of the agencies not consolidated to concentrate on their primary tasks. One such plan was introduced by Treasury Secretary Lloyd Bentsen in March of 1994. The plan called for folding, into a new independent federal agency (called the Banking Commission), the regulatory portions of the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), and the Office of Thrift Supervision (OTS). This plan would save the government $150 to $200 million a year. This would also allow the FDIC to concentrate on deposit insurance and the Fed to concentrate on monetary policy (Anonymous 88). Of course this is Washington, not The Land of Oz, so everyone can't be satisfied with this plan. Fed Chairman Alan Greenspan and FDIC Chairman Ricki R. Tigert have been vocal opponents of the plan. Greenspan has four major complaints about the plan. First, divorced from the banks, the Fed would find it harder to forestall and deal with financial crises. Second, monetary policy would suffer because the Fed would have less access to review the banks. Thirdly, a supervisor with no macroeconomic concerns might be too inclined to discourage banks from taking risks, slowing the economy down. Lastly, creating a single regulator would do away with important checks and balances, in the process damaging state bank regulation (Anonymous 88). To answer these criticisms it is necessary to make clear what the Fed's job is. The Fed has three main responsibilities: to ensure financial stability, to implement monetary policy, and to oversee a smoothly functioning payments system (delivering checks and transferring funds) (Syron 3). The responsibilities of the Fed are linked to the banking system. For the Fed to carry out its job it must have detailed knowledge of the working of banks and financial markets. Central banks know from the experience of financial crises that regulatory and monetary policy directly influence each other. For example, a banking crises can disturb monetary policy, discouraging lending and destroying consumer confidence, they can also disrupt the ability to make or receive payments by check or to transfer funds. It is for these reasons that it is argued that the Fed must maintain a regulatory role with banks. The Treasury plan would leave the Fed some access to the review of banks. The Fed, which lends through its discount window and operates an interbank money transfer system, would have full access to bank examination data. Because regulatory policy affects monetary policy and systemic risk, it is necessary that the Fed have at least some jurisdiction. The Fed must be able to effectively deal with current policy concerns. The Banking Commission would be mainly concerned with the safety and stability of the banks. This would encourage conservative regulations, and could inhibit economic growth. The Fed clearly has a hands on knowledge of the banking system. The common indicators of monetary policy - the monetary aggregates, the federal funds rate, and the growth of loans - are all influenced by bank behavior and bank regulation. Understanding changes and taking action in a timely fashion can be achieved only by maintaining contact with examiners who are directly monitoring banks (Syron 7). The banking system is what ultimately determines monetary policy. It is only common sense to have personnel in the Fed that have a better understanding of the system other than just through financial statements and examination reports. The Fed also needs the authority to change bank behavior that is inconsistent with its established monetary policy and with financial stability. This requires both the responsibility for writing the regulations and the responsibility for enforcing those regulations through bank supervision. State banking charters have already started to be affected. Under the proposed plan, state chartered banks would be subject to two regulators. While the federal bank would have only one. Thus, making the state bank charter less attractive. However, an increasing

Great Love Quotes That Will Evoke the Flame of Love

Great Love Quotes That Will Evoke the Flame of Love Great is what great does. Great love quotes are no exception to this rule. These love quotes have become great because they have infused and inspired the feelings of love in many a soul. A few of these great love quotes are sure to stir up love and romantic feelings in your heart too. Love is the strange bewilderment, which overtakes one person on account of another person. James Thurber and E. B. White The best and most beautiful things in this world cannot be seen or even heard, but must be felt with the heart. Helen Keller The most difficult thing to explain in life is the simplest truth called love. Ramanathan Srinivasan A dream you dream alone is only a dream. A dream you dream together is reality. John Lennon Its a very dangerous state. You are inclined to recklessness and kind of tune out the rest of your life and everything thats been important to you. Its actually not all that pleasurable. I dont know who the hell wants to get in a situation where you cant bear an hour without somebodys company. Colin Firth As we have explained, in first love the soul is taken long before the body; later the body is taken long before the soul; sometimes the soul is not taken at all. Victor Hugo As soon go kindle fire with snow, as seek to quench the fire of love with words. William Shakespeare Love cannot endure indifference. It needs to be wanted. Like a lamp, it needs to be fed out of the oil of anothers heart, or its flame burns low. Henry Ward Beecher Love is when you look into someones eyes and go all the way inside; to their soul and you both know... instantly! Angela Chase Find the person who will love you because of your differences and not in spite of them and you have found a lover for life. Leo Buscaglia With love one can live even without happiness. Fyodor Dostoyevsky Love is a better teacher than duty. Albert Einstein The prerequisite for making love is to like someone enormously. Helen Gurley Brown To love is nothing. To be loved is something. But to love and be loved, thats everything! T. Tolis True love stories never have endings. Richard Bach A woman knows the face of the man she loves as a sailor knows the open sea. Honore de Balzac In real love you want the other persons good. In romantic love you want the other person. Margaret Anderson Youll discover that real love is millions of miles past falling in love with anyone or anything. When you make that one effort to feel compassion instead of blame or self-blame, the heart opens again and continues opening. Sara Paddison Love is like war: easy to begin but very hard to stop. H. L. Mencken True love is when your heart and your minds are saying the same thing. Leanna L. Bartram I have found the paradox that if you love until it hurts, there can be no more hurt, only more love. Mother Teresa Truly loving another means letting go of all expectations. It means full acceptance, even celebration of anothers personhood. Karen Casey Love is a friendship set to music. Joseph Campbell Blessed is the season, which engages the whole world in a conspiracy of love. Hamilton Wright Mabie I think what motivates people is not great hate, but great love for other people. Huey Newton Life without love is like a tree without blossoms or fruit. Khalil Gibran Love takes off masks that we fear we cannot live without and know we cannot live within. James Baldwin Love is a gift, not an obligation, follow your heart and always trust the person you love. Anonymous Love does not begin and end the way we seem to think it does. Love is a battle, love is a war; love is a growing up. James A. Baldwin Honesty is the only way with anyone, when youll be so close as to be living inside each others skins. Lois McMaster Bujold Love is something eternal†¦ The aspect may change, but not the essence. Vincent Van Gogh Love is a smoke made with the fume of sighs. William Shakespeare Whats meant to be will always find a way. Trisha Yearwood To be able to say how much you love is to love but little. Petrarch The best proof of love is trust. Joyce Brothers Whoso loves, believes the impossible. Elizabeth Barret Browning