Heard an alarming story on Marketplace tonight. If you’re like me, you see a lot of things on the web and in your inbox about how welfare mothers, SNAP recipients, retired people and foreigners are living so large on our tax dollars that the whole country will soon be bankrupt.
This is about the real culprits.
After the crash of 2008, banking regulators wrote new rules requiring banks to increase the reserves they must keep to cover potential losses and prevent bank failures. The Basel Committee of the Group of Central Bank Governors and Heads of Supervision today released revised rules on their Liquidity Coverage Ratio requirements for banks in the world’s twenty largest economies to hold cash or liquid assets in reserve to respond to future crises. In a victory for bank lobbyists worldwide, the new rules phase in the 2015 reserve requirements so that they will not be fully funded until 2019, and allow stocks, bonds and mortgage backed securities (!) to be held in lieu of cash.
Again, that was mortgage backed securities, the Thing that Ate the World Economy.
Time for me to start a new string of “Lazlo Letters.” I have a new congressman now, a right-wing gun nut, probably pro-catfood. I know that his party was the biggest obstacle in the way of financial reform after the crash, and that they were the biggest recipient of campaign money from the financial industry in the last election cycle, but I will remind him that millions of Americans lost jobs, homes and financial security in the housing crash, and I’m going to ask him to hold Wall Street’s feet to the fire.