Posts Tagged ‘Glass-Steagall’
Wednesday, November 2nd, 2011
We’re all happy about the banks backing down from their new fees for customers, right? Bank of America decided to not charge customers the $5 fee to use their debit cards in places other than the bank. Big deal, now you have access to YOUR money. The change in the cold, cold corporate heart at B of A is considered a consumer win. But at what price?
While reversing the $5 fee made mainstream headlines, B of A, with approval and encouragement from the Federal Reserve (that exists by and for banks, not the U.S. government), moved $53 TRILLION of derivative contracts from the gambling reckless risk-taking side of the behemoth corporation (the bank holding company, investment house) to the retail consumer side Bank where funds are insured by the FDIC. That means that the massive losses by Merrill Lynch and the junk derivatives that had a Baa1 rating (the third lowest investment Moody grade) become overnight A2 rated because now the American taxpayers will cover the risk of these gambles failing. That’s you and me, the 99%-ers.