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That's every bank working the "traditional" model. Short term deposits fund longer term lending. Every bank could be insolvent if the Fed didn't offer them a line to draw on. Libor market only goes so far these days. Regulators though do not step in until its painfully obvious a bank can't source funds and therefore is practically insolvent.
Unless Geithner and friends plan to change The Riegle-Neal Act of 1994 which prohibits banks from holding more than 10% of domestic deposits such a massive deal is unlikely. (Ironically, former BofA CEO Ken Lewis was fighting to raise that cap.) Right now JPM holds about 8% of U.S. deposits.
Unless Geithner and friends plan to change The Riegle-Neal Act of 1994 which prohibits banks from holding more than 10% of domestic deposits such a massive deal is unlikely. (Ironically, former BofA CEO Ken Lewis was fighting to raise that cap.) Right now JPM holds about 8% of U.S. deposits.
From that article:
"Under federal law, JP Morgan and Bank of America could not combine because together they would have too large a share of several financial markets in the US. Treasury would apparently work with other government agencies to have those rules suspended and then the new combined bank would sell assets to get back into compliance later.
The government’s preference for a deal with JP Morgan rather than a federal takeover may be because it does not want to set the precedent of Washington owning one of the world’s largest banks “paid for” with taxpayer money."
That's every bank working the "traditional" model. Short term deposits fund longer term lending. Every bank could be insolvent if the Fed didn't offer them a line to draw on. Libor market only goes so far these days. Regulators though do not step in until its painfully obvious a bank can't source funds and therefore is practically insolvent.
not everybank has the crooked loans from countrywide sitting in their profile
sorry but bank of america is toast
"Under federal law, JP Morgan and Bank of America could not combine because together they would have too large a share of several financial markets in the US. Treasury would apparently work with other government agencies to have those rules suspended and then the new combined bank would sell assets to get back into compliance later.
The government’s preference for a deal with JP Morgan rather than a federal takeover may be because it does not want to set the precedent of Washington owning one of the world’s largest banks “paid for” with taxpayer money."
More short sellers starting rumors in the attempt to maximize their profits. Some won't be happy until our financial system is in ruin and our economy is a self-fulfilling prophecy.
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