Fed Governor Tarullo on Bank Supervision: "Hand Over the Damn Keys Already, Idiots"
Hey look, Fed Governor Daniel Tarullo wants to throw in his $0.02 ($0.000002 seasonally-adjusted for inflation of course) on bank supervision before the House and who are we to deny him? Well that isn't our job. But it is our job to shoot as many holes in his story as possible while LOLing all the way so let's try that, shall we?
Without insisting you read the entire speech, found here via the Fed Board of Governors, it is safe to say that Tarullo thinks handing over the regulatory keys to the Fed is a fabulous idea. Naturally.
To be fully effective, consolidated supervisors need the information and ability to identify and address risks throughout an organization. However, the BHC Act, as amended by the so-called Fed-lite provisions of the Gramm-Leach-Bliley Act, places material limitations on the ability of the Federal Reserve to examine, obtain reports from, or take actions to identify or address risks with respect to both nonbank and depository institution subsidiaries of a bank holding company that are supervised by other agencies. Consistent with these provisions, we have worked with other regulators and, wherever possible, sought to make good use of the information and analysis they provide. In the process, we have built cooperative relationships with other regulators--relationships that we expect to continue and strengthen further.
OK, wait a second!
Is Tarullo referring to this sort of collaborative effort between regulators? Because according to Hank Paulson, Bernanke didn't bring in the SEC nor the FDIC into the Bank of America/Merrill Lynch loop until after the first of the year. Basically, our boy Zimbabwe Ben circumvented the entire system, choosing to use his regulatory road dogs as little more than crime scene cleaners after the threats had flown and Ken Lewis had been sufficiently frightened by Paulson's creepy pinky waving in his face.
This is merely an attempt to prove the following:
A) the Fed has not failed in its duties (Tarullo certainly knows that is a lie)
B) the Fed plays well with others (Fedgate also debunks this)
C) if we do not give the Fed the regulatory power it insists it should be granted in OMGObama's overhaul, the sky will fall and God will kill all the baby kittens (and where's Nancy Pelosi to say America will lose $5 million jobs for every minute that this power rests with other agencies eh?)
I remind you here, dear reader, that Tarullo has also authored the New World Order handbook for financial regulation (see also: A Globalist's Financial Wet Dream), the cleverly titled "Banking on Basel" - so he's gunning hard for consolidation. First, knock out the alphabet soup of American regulation and next... the world! Oh hasn't he ever watched the Saturday morning cartoons? I have told these people time and time again, they never ever win and somehow their world domination schemes always fail in the end.
God forbid we repeat the same mistakes as the UK (uhhh, aren't we in bed with them on this globalization scheme? Just checking):
Splitting up bank supervision and monetary policy did not work in the United Kingdom and would be a bad idea in the United States, a senior Federal Reserve official said on Tuesday.(Reuters)
"A graphic illustration of what can happen when the central bank is not involved in supervision was observed a couple of years ago in the United Kingdom," Fed Board Governor Daniel Tarullo told the U.S. Senate Banking Committee.
"The Bank of England, the central bank, was not involved in supervision at all, and when a significant financial institution, Northern Rock, failed, the Bank of England was not in a position to be able to make judgments about a: the failure of Northern Rock and b: the ripple effects within the system," he said during testimony.
All in all, there's nothing useful to be found here except the rant of a central bank governor who knows his agency is in hot water and therefore has been dispatched to defend the temple as it crumbles before him.