by Linda Beale
Barney Frank and the need for a risk-based bank fee
That post about the McCain-Paul environmental devastation and revenue decimation bill (somehow mistakenly given the label of a “jobs bill” by the misguided pair ) suggests the unprecedented extent to which our Congressional reps now believe they can use and abuse national resources for the benefit of crony capitalism.
At least there still seem to be some who are interested in directing their firepower at those who have caused the recession and job losses and whose activities could well cause further harm. Barney Frank has written a letter to the so-called ‘supercommittee’ asking that they include the risk-based bank fee assessable against ‘too big to fail’ banks as part of the deficit reduction package. See Letter.
Given that the very existence of too big to fail banks implies that the government will again have to come to their aid, it seems entirely appropriate to have these banks pay into the Treasury to recognise the guarantee they are being provided. Further, banks have made good profits since the crisis because of their ability to borrow money extraordinarily cheaply from the Fed, and they have nonetheless continued to demand fairly steep returns for their lending and other activities. Having them return part of that largess through a risk-based fee is a reasonable approach that should also help to discourage the excessive speculative risk-taking in which they engaged.
originally published at ataxingmatter
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