Bank of America, at the request of counterparties, just moved a Merrill Lynch derivatives unit to an Insured Deposits unit, under protest by the FDIC.The FDIC does not like the move because it puts the FDIC at risk. Bernanke is fine with the move, which means the Fed and FDIC are once again in an open feud about risk management
Read the rest at MISH'S Global Economic Trend Analysis, Bank of America Moves a Merrill Lynch Derivatives Unit to an Insured Deposits Unit (Putting FDIC at Risk); Fed approves Move, FDIC Doesn't
Also, Yves Smith at Naked Capitalism, Bank of America Deathwatch: Moves Risky Derivatives from Holding Company to Taxpayer-Backstopped Depositors (h/t Kevin Fathi)
UPDATE: Trader's Crucible piles on, Can We Prevent a $100 Billion+ BoA Taxpayer Ripoff? There's an important comment of Beowulf originally posted at Yves' place reposted by TC.
Let the outrage begin, or better, increase.
4 comments:
wall street journal
posts something about
Banks' Files Are Seized
The European Commission seized documents from several major banks, marking the escalation of a world-wide law-enforcement probe into how key interest rates are set, according to people familiar with the matter.
all the hub bub and they don't know how % rates are set !
they are rigged over there
but set by fancy here at Fed
Bill Black's post @ NEP:
http://neweconomicperspectives.blogspot.com/2011/10/not-with-bang-but-whimper-bank-of.html#more
Bill was also on NPR in Boston yesterday on the program "On Point".
http://onpoint.wbur.org/2011/10/18/prosecuting-wall-street
There is no doubt that this move should be made highly, highly public.
This is a moment. It is a moment that shows everything sick and wrong with our system.
And we need to push this moment.
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