AntiCitizenOne has alerted me to a US Federal Reserve letter dated October 11, permitting certain financial adjustments within the Barclays banking system. These could amount to as much as $20 billion.
Similar permissions have recently been granted to Citigroup, JPMorgan Chase, Bank of America and Deutsche Bank (see page 3).
Any comments?
UPDATE
Now RBS also, for up to $10 billion! (Thanks again to AntiCitizenOne for the alert.)
Mr Hell, meet Mr Handcart.
ReplyDeleteThis makes me sick. 23A exemptions are simply not supposed to happen.
ReplyDeleteNow RBS!
ReplyDeleteShit
http://www.federalreserve.gov/boarddocs/legalint/FederalReserveAct/2007/20071012/20071012.pdf
Hi Sackerson:
ReplyDeleteIf you want to know what 23A exemptions are about, the best explanation is on page 2 of the document you linked (the Fed writes this verbatim every time it grants an exception). The implications are tacitly given on the same page in the second paragraph. The bottom line is that the restriction is in place to maintain the integrity of the bank, even if it means letting a subsidiary or even the holding company lose capital.
23A/regdub exemptions are not uncommon. The big hazard that I see here is that all of these recent special requests are being made by conglomerations that have announced or face huge losses. The distinct depository institutions in these "fortress holding companies" will be lending to their affiliates and, thus, extending the risk to the branch (and tax-payers given that the branch is government insured).