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Government Guarantee

All articles tagged with #government guarantee

finance3 years ago•3 min saved

The Fed's Dilemma: Balancing Guarantees and Interest Rates.

US Treasury Secretary Janet Yellen said the government could guarantee deposits at other banks if they pose a threat to the banking system, but only if they suffer a run and their collapse would affect the rest of the banking sector. Regional banks initially rose on the news, but quickly lost ground in after-hours trading. Meanwhile, gold prices are expected to breach their all-time high of $2,075 in the coming weeks, and Morgan Stanley is now "outright bullish" on stocks in Asia and emerging markets. The Federal Reserve's decision on interest rates is also eagerly awaited.

via CNBC|

#finance #government-guarantee #janet-yellen

finance3 years ago•7 min saved

"Preventing Another Banking Crisis: Lessons from the Past and Present"

Financial regulation experts are proposing two big ideas to prevent another banking crisis. The first idea is to explicitly insure all deposits, which could prevent a run on a troubled bank and help preserve small and midsize banks. The second idea is to create a new type of low-risk bank, where deposits at "core banks" would be insured by the government, but these lenders would be allowed to participate only in low-risk businesses. Wholesale banks would draw funding from private investors but wouldn't be protected by the government.

via The New York Times|

#banking-regulation #deposit-insurance #finance

finance3 years ago•7 min saved

"Addressing Fragility in Banking: Ideas and Concerns"

Financial regulation expert Robert Hockett and Representative Ro Khanna are proposing a bill to raise or remove the Federal Deposit Insurance Corporation's (FDIC) coverage cap, which currently insures deposits up to $250,000. Hockett argues that insuring all deposits could prevent a run on a troubled bank and help preserve small and midsize banks. However, former FDIC chair Sheila Bair disagrees, stating that if a $200 billion bank can bring down the banking system, then the system is not stable or resilient. Lowell Bryan, a former head of McKinsey & Company's banking practice, proposes creating a new type of low-risk bank to limit risks in the banking industry.

via The New York Times|

#banking-regulation #deposit-insurance #finance