FDIC Discovers Banks Are Too Big To Fail, Again
The Financial Times highlights how banks are sitting on 'unrealized losses' from plummeting bond prices, delicately framing new regulatory maneuvers to prevent another 2008. They suggest bank 'bail-unders' – where shareholders take the hit – but the real narrative is the cyclical reassurance that the financial system is always on the brink, yet always saved by some form of public intervention.
Remember the 'too big to fail' doctrine from 2008? The Federal Reserve pumped trillions into the financial system, with institutions like Bank of America and Citigroup receiving hundreds of billions, as documented by the Congressional Oversight Panel's March 2009 report. It's not a bug; it's a feature. So, when pundits discuss 'pre-emptive bank bailouts,' one might wonder who the 'pre-emption'
truly protects, and whose fun and profit is truly at stake. (Hint: it’s not yours.) How many cycles of bank 'risk-taking' and public 'rescue' before we acknowledge the house always wins, and 'average taxpayers' always lose? It seems some zombie banks just keep getting reanimated.