Read

User menu

Search form

The Riskiest Banks are Still Those We Bailed Out

The Riskiest Banks are Still Those We Bailed Out
Mon, 9/24/2012 - by Pat Garofalo
This article originally appeared on Think Progress

According to a new report from the Bank of International Settlements — which provides research to the world’s central bankers — bailed out banks in both the U.S. and around the world continued to be riskier than non-bailed out banks, even after they received taxpayer dollars during the financial crisis of 2008:

We find no evidence that rescued banks reduced the riskiness of their new lending more than non-rescued banks in response to the crisis and the public rescues. Even as lending volumes decreased across the board in 2009, rescued banks continued to write riskier syndicated loans, as reflected by their involvement in the leveraged loan segment and in the spreads charged on the facilities that they originated. We also find, unsurprisingly, that the syndicated lending of banks that later received a bailout was riskier before the crisis than that of non-rescued institutions. [...] During the crisis, rescued banks did not reduce the riskiness of their new syndicated lending compared to their non-rescued peers. In fact, our results suggest that the relative riskiness of their lending increased.

As Reuters columnist James Saft noted, “This is both astounding and totally predictable. Astounding because it was so clear that those risks were not just foolish but destructive. Predictable because of course the banks realized that they had not been just lucky but had been given a special exemption from death which will be very hard to revoke.”

Despite this and other clear evidence that the banks are totally uninterested in learning any lessons from the financial crisis, Republicans are attempting to bog down or repeal the Dodd-Frank financial reform law.

But several prominent banking executives have said that the size and complexity of today’s mega-banks makes them unmanageable. A recent report found that the financial crisis cost the U.S. economy $12.8 trillion.

3 WAYS TO SHOW YOUR SUPPORT

ONE-TIME DONATION

Just use the simple form below to make a single direct donation.

DONATE NOW

MONTHLY DONATION

Be a sustaining sponsor. Give a reacurring monthly donation at any level.

GET SOME MERCH!

Now you can wear your support too! From T-Shirts to tote bags.

SHOP TODAY

Sign Up

Article Tabs

There are multiple similarities between Trump and the British monarch when looking at the 27 grievances the framers outlined in their 1776 declaration.

It is not hyperbole to say that the world’s richest man has now illegally seized control of America’s checkbook and the entire federal workforce.

Over the next four years, we’re about to be inundated with a flood of lies—including from federal agencies themselves.

We have to be smart in how we fight against Trump and the Republican Party this time around. That means picking our battles wisely, and not taking bait that’s dangled in front of our faces.

Over the next two years, Democrats have the unfettered ability to be an albatross around the neck of the GOP — and to make sure that what little they manage to get done due to their paper-thin majorities becomes the reason for their undoing.

There are multiple similarities between Trump and the British monarch when looking at the 27 grievances the framers outlined in their 1776 declaration.

The grassroots opposition to President Donald Trump is hitting the streets everywhere.

Protests are set to take place in several major cities across the U.S. on Monday, the Presidents Day holiday, according to activists.

It is not hyperbole to say that the world’s richest man has now illegally seized control of America’s checkbook and the entire federal workforce.

Over the next four years, we’re about to be inundated with a flood of lies—including from federal agencies themselves.

Over the next two years, Democrats have the unfettered ability to be an albatross around the neck of the GOP — and to make sure that what little they manage to get done due to their paper-thin majorities becomes the reason for their undoing.

Posted 1 month 4 days ago

Over the next four years, we’re about to be inundated with a flood of lies—including from federal agencies themselves.

Posted 1 week 6 days ago

We have to be smart in how we fight against Trump and the Republican Party this time around. That means picking our battles wisely, and not taking bait that’s dangled in front of our faces.

Posted 2 weeks 6 days ago

It is not hyperbole to say that the world’s richest man has now illegally seized control of America’s checkbook and the entire federal workforce.

Posted 1 week 6 days ago

The way the urban commons create a space to solve material problems and enable social movements to forge city-wide networks are antidotes to people being attracted towards the far-right.

Posted 2 weeks 6 days ago

The way the urban commons create a space to solve material problems and enable social movements to forge city-wide networks are antidotes to people being attracted towards the far-right.

We have to be smart in how we fight against Trump and the Republican Party this time around. That means picking our battles wisely, and not taking bait that’s dangled in front of our faces.