By law the Banks are allowed to keep literally tens of trillions of dollars in derivatives off book, so when Banks report their earnings they don't have to include any information relating to their off book paper.
On Oct 18, 2011 Bloomberg reported that Banks were trying to transmute the notional value of off book derivatives to FDIC insured accounts by moving the questionable paper from the investment to the banking divisions. The dollar amount of the two banks mentioned was over $150 trillion dollars. Let's be clear, if the economy suffers another crash and banks begin to fail, there is no money that FDIC that has to cover that toxic paper, but it would probably create a good excuse for it not to make good on any of its obligations to consumers.
The Banks are zombies, and have been since 2008, but the US Government helps the Financial Sector to hide that fact.
http://www.bloomberg.com/news/2011-10-18/bofa-said-to-split-regulators-over-moving-merrill-derivatives-to-bank-unit.html
Read the Article at HuffingtonPost
No comments:
Post a Comment