Breaking down the Geithner plan

September 14, 2009

Paul Miller, the analyst that covers banks and thrifts for FBR Capital Markets, put out a report today breaking down Tim Geithner’s Framework for Reforming Banking Firms. Geithner’s plan is a good document, showing that Treasury takes very seriously the need to establish tougher, more robust capital requirements for banks. Miller broke down the recommendations in the handy chart below.

If you have trouble reading it, here is the PDF (linked to with permission).

(Click the table to enlarge in a new window)


Miller can take some credit for influencing Geithner’s report. More than any other analyst, he has emphasized the importance of tangible common equity as the best buffer to protect banks from collapse.


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1) What about securitization. Not a word. Banks can continue to securitize anything, in any manner, to any degree of leverage they want?

2) What about those rating agencies? Not a word. Guess they can continue to rate trash as gold…

3) What about mortgage standards and enforcement? Not a word. Maybe Geithner want to let the subprime get pumped again next year. You know, for old time sake.

4) What about separation of commercial banking, investment banking, insurance? Not a word. Maybe Geithner sees TBTF a good thing?

5) What about those bonus? Not a word. Maybe Geithner recognizes that US bankers will commit suicide if they don’t get billion dollar bonuses. It’s a cultural thing …

6) What about banking casino without rules and transparency? Not a word. Even Las Vegas has rules.

Posted by The Real Deal | Report as abusive

I agree with every one of your points TRD. I think the document is good as far as it goes, which clearly isn’t far enough. I’ll have a column on that tomorrow!

Posted by Rolfe Winkler | Report as abusive