“Implicit” Government Guarantees To Bail Out Bank Creditors Tighten Their Grip On US Taxpayers
Wolf Richter
ZeroHedge.com
12/04/2013
One of the few rebellious Fed heads, Richmond Fed President Jeffrey Lacker, fired another salvo when he was testifying at the House Judiciary Committee’s hearing. And he hit Wall Street risks that are wrapping their growing tentacles ever more tightly around the economy and taxpayers.
The hearing, according to Chairman Bob Goodlatte, would examine whether the Bankruptcy Code is “best equipped” to deal with the insolvency of large banks, such as the “unusual level of speed” needed for their “efficient and orderly resolution,” and the “unique threats” their collapse would pose to the “broader stability of the economy.”
Lacker was on his turf. For years, he has spoken out against QE. Earlier this year, he committed heresy by admitting that “labor market conditions are affected by a wide variety of factors outside a central bank’s control“; he’d yanked away the Fed’s fig leaf for its QE and zero-interest-rate policies. And in June 2012, before QE3 had appeared on the horizon, he’d stunned his listeners when he said, “Monetary policy doesn’t have a lot of capability right now for enhancing growth.” He dissented at the FOMC meetings in 2012 when he last was a voting member. His concerns were confirmed by QE3’s subsequent failure to budge the economy, though it inflated glorious assets bubbles all around.
The Rest…HERE
