Earlier today I wrote that Sheila Bair is one of the few financial regulators who gets it. And by getting it, I mean not sucking up to the banks and the big money interests on Wall Street. You know, the guys (and most of them are guys), who got us into this financial mess. Tim Geithner, on the other hand, is a regulator who just doesn’t get it.
Here’s a summer quiz: Identify the following two US banks:
1. This institution has been profitable throughout the credit crisis. Last year, it reported net income of $6bn on revenues of $60bn, despite taking big hits in its consumer operations in North and South America in the fourth quarter. At the end of the first quarter the bank had total assets of $958 billion, supported by a healthy deposit base of $660 billion.
The FT has a report that banks are looking to slice and dice risky assets on their balance sheet so they can unload some of the capital-gobbling securities to investors. The banks argue that this type of securitization is different than those CDOs that helped suck the financial system into a sinkhole since it doesn’t rely on leverage and it’s more transparent.