Word: banke
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Dates: during 2000-2009
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...most exciting day of the financial year should have been today because the government releases the results of its multi-month bank "stress test" program which includes thorough vetting of the health of America's 19 largest banks. That part of the drama is over. Someone leaked almost all of the information on the banks that failed the tests and how much money they will be asked to bring in as new capital. Citigroup (C), Wells Fargo (WFC), and Bank of America (BAC) are troubled, as the government sees it, and will have to improve their balance sheets...
...excitement over the bank tests was an important replacement for the thrill of Bernie Madoff's weird and exotic life. He was remarkably clever and had great skill in robbing otherwise intelligent people blind. A careful analysis of Madoff's actions has not uncovered much that was not clear in the first few weeks of the investigation other than the fact that the people who gave him money were not intelligent at all. Madoff was such an improbable monster that the public followed the story with untiring fascination week-after-week. Once Madoff went to prison, the magic wore...
...primary reason that news organizations gave the bank story so much space was that the public knew the tests were a fraud. Warren Buffett said so, along with a number of other financial analysts. Bank balance sheets are so complex that applying one set of measures for all of them is irresponsible reductionism, these analysts argued. The second part of the fraud was much more elaborate. The government, led by Henry Paulson, forced large banks to take TARP money that they did not need. He made sure that the taxpayers received preferred shares in the firms in exchange...
...debate over whether the process was fair and whether the criteria were intelligently chosen will go on for years and will eventually become an important part of the history of American capitalism and the banking system. In the meantime, the public has loved watching the tension of big companies pitted against big government. Rich and famous bankers have been ridiculed in public. Some have lost their jobs. Hank Paulson, a well-built former Dartmouth football player and former head of Goldman Sachs and mild-mannered Ben Bernanke have been accused of manipulating a major decision by a public company, Bank...
Federal Reserve chairman Ben Bernanke, speaking via satellite to a bank conference sponsored by the Chicago Federal Reserve Bank, said on Thursday morning that the stress tests "will allow, I hope, for greater confidence in the banks." But even though the stress tests are over, the banks and their investors are not out of the woods...