Comments on: Everyone into the next shadow banking system http://blogs.reuters.com/felix-salmon/2011/09/19/everyone-into-the-next-shadow-banking-system/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: best essay writer http://blogs.reuters.com/felix-salmon/2011/09/19/everyone-into-the-next-shadow-banking-system/comment-page-1/#comment-54970 Mon, 13 Oct 2014 11:49:24 +0000 http://blogs.reuters.com/felix-salmon/?p=10030#comment-54970 Great website you have here but I was curious if you knew of any message boards that cover the same topics discussed in this article? I’d really love to be a part of online community where I can get feedback from other knowledgeable individuals that share the same interest. If you have any suggestions, please let me know. Thanks a lot!

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By: PPeyret http://blogs.reuters.com/felix-salmon/2011/09/19/everyone-into-the-next-shadow-banking-system/comment-page-1/#comment-31126 Wed, 21 Sep 2011 01:32:27 +0000 http://blogs.reuters.com/felix-salmon/?p=10030#comment-31126 Prepaid cards are issued by banks, not by some alternative financial services providers. “Prepaid” is actually a pretty bad adjective. Even checking accounts are “prepaid”: try spending money out of a checking account without having deposited some money in it first!

One of the reasons prepaid cards are gaining ground is that the corresponding accounts held by the issuing banks are usually “co-mingled” into a single very large account, making them somewhat cheaper for the banks to operate (than individual checking accounts)
The vast majority of banks hosting prepaid card accounts provide “pass through” FDIC insurance, providing the same protection as individual checking accounts.
And now, for prepaid cards to receive deposits from federal or state sources (tax refunds, benefits…), they must comply with Regulation E for the protection of consumers. This makes prepaid card accounts very similar to checking accounts.
Expect the Center for Financial Services Innovations (“CFSI”) to push de-facto rules and principles for prepaid cards demanding FDIC and Reg E protection, to ensure that the whole industry is homogeneous.

These are hardly the premises for a “shadow” banking system: banks are at the heart of prepaid, and consumer protections will be de rigueur for any serious competitor in this space.

Full disclosure: my own company, Plastyc, manages prepaid card programs and has received funding from Core Innovation Capital, the investment partner of CFSI.

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By: GeorgeChaney http://blogs.reuters.com/felix-salmon/2011/09/19/everyone-into-the-next-shadow-banking-system/comment-page-1/#comment-31085 Tue, 20 Sep 2011 17:32:27 +0000 http://blogs.reuters.com/felix-salmon/?p=10030#comment-31085 Hi Barbara, interesting read. I’ve considered using the pre-paid cards for one time transactions in business. I can see where they could be abused as a means of paying “cash” for services and avoiding the issues associated with tax reporting. Creating a shadow economy outside the fingers of Federal, State and City.

SteveHamlin, where there is a viabile market (i.e. reasonable regualtion and opportunity) entrepreneurs will step in to fill the void. That’s if we have any left after D.C. gets done with us….

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By: SteveHamlin http://blogs.reuters.com/felix-salmon/2011/09/19/everyone-into-the-next-shadow-banking-system/comment-page-1/#comment-31083 Tue, 20 Sep 2011 13:40:33 +0000 http://blogs.reuters.com/felix-salmon/?p=10030#comment-31083 Barbara: good article, I just wanted to point out that shadow banking usually refers to major creditors that are outside of the traditional banking system. Private non-bank financial institutions buying home loans from mortgage brokers, auto loans turned into ABS and sold to private investors (and ABS of all sorts), etc. All not showing up on the balance sheets of the banking system.

If the consumer asset balances on these cards are ultimately held on bank balance sheets, then this is not really shadow banking.

The real “next shadow banking system” question is what do we do after Frannie starts slowing down – it currently is the ultimate financier of 80+% of U.S.home mortgages. The structured ABS market is dead or on life support, and one the reasons that overall credit growth has stalled. Traditional bank leverage should be coming down.

On whose balance sheet is future credit creation going to be booked?

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By: BarbaraKiviat http://blogs.reuters.com/felix-salmon/2011/09/19/everyone-into-the-next-shadow-banking-system/comment-page-1/#comment-31077 Tue, 20 Sep 2011 01:59:24 +0000 http://blogs.reuters.com/felix-salmon/?p=10030#comment-31077 Hey, Curmudgeon! Hey, Lunasea! Thanks for the warm welcome. RE financial literacy education, here are two of my favorite papers:
http://www.aspeninstitute.org/publicatio ns/two-cheer-school-based-financial-educ ation
http://www.law.uiowa.edu/documents/ilr/w illis.pdf

Perhaps I should write a blog post…

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By: Lunasea http://blogs.reuters.com/felix-salmon/2011/09/19/everyone-into-the-next-shadow-banking-system/comment-page-1/#comment-31076 Tue, 20 Sep 2011 00:20:37 +0000 http://blogs.reuters.com/felix-salmon/?p=10030#comment-31076 Maryland’ Comptroller has been trying for several years to require financial literacy in schools. Latest shot is a petition to present to the next legislative session.
http://www.comp.state.md.us/comptroller/ initiatives/literacy/default.asp

And I second curmudgeon’s welcome back!

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By: mfw13 http://blogs.reuters.com/felix-salmon/2011/09/19/everyone-into-the-next-shadow-banking-system/comment-page-1/#comment-31075 Tue, 20 Sep 2011 00:02:42 +0000 http://blogs.reuters.com/felix-salmon/?p=10030#comment-31075 Most people most definitely lack the knowledge to manage their own finances, and one of the reasons is that they are never taught how to. Financial literacy is not part of any school curriculum, and most parents lack the knowledge themselves, and therefore cannot effectively teach the topic to their own children.

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By: Curmudgeon http://blogs.reuters.com/felix-salmon/2011/09/19/everyone-into-the-next-shadow-banking-system/comment-page-1/#comment-31069 Mon, 19 Sep 2011 21:13:00 +0000 http://blogs.reuters.com/felix-salmon/?p=10030#comment-31069 Barbara! It’s great to read you again. You’re somewhere in my LinkedIn; I should catch up with what you’re doing there.

I think the real tragedy here is that people lack either the knowledge or the discipline to manage their finances without such an explicit vehicle. Is it a generational thing, or a cultural one? I grew up with no understanding of personal finances, and my reaction as a young adult was to teach myself the subject, and to be conservative in my spending behavior. Clearly others learned other lessons.

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