The End Of Freedom For American Banks
I would like to see a regulatory system aimed at insulating the real economy from financial innovation insofar as that is possible. That may require limits on the freedom of action of commercial banks.
– Robert Solow, 1987 Nobel Prize Winner in Economics
Last month’s sweeping rescue plan, in which Citigroup got a second capital infusion that left the government as the bank’s largest shareholder, with a 7.8% stake, coincided with federal regulators putting Citigroup on a tighter regulatory leash, people familiar with the situation said.
As part of that scrutiny, Citigroup’s two main regulators, the Federal Reserve and Office of the Comptroller of the Currency, expect to essentially have veto power over key strategic decisions at the firm, these people said.
– “U.S. Ratchets Up Citi Oversight” (subscription required), The Wall Street Journal, Wednesday December 17, C1
Chilling Wall Street Journal article today on government oversight of Citi since the bailout a few weeks ago.
Can we make that acquisition, Big Brother? Can we make that loan, Big Brother? Can we make that investment, Big Brother?
This kind of thing worries me……