A Comment to Mark Whitehouse’s April 5, 2013 Bloomberg View Article
by Patrick Sims, Director of Research, psims@hamiltonps.com, (202) 822-1205
So Mark Whitehouse hates big banks. We get it.
We disagree with his points, and there is a point-by-point rebuttal below, but this all comes down to one fundamental question: Do large global financial institutions actually provide value in a large global economy?
We would argue that they do. Nothing that we have seen in the business world presents compelling evidence that small or even regional banks are capable of providing the transaction support, the hedging strategies, the lending facilities, the payment options or the many other financial needs of companies operating on a global scale.
If you think that community banks, regional banks, or even super-regional banks can perform all of these services, then Mark Whitehouse may be right. Blow it all up and to hell with the consequences. But if you think that maybe they can’t, then you really want to try to fix the too-big-to-fail problem through regulatory changes, and that is exactly the process that is underway right now
The …
VIDEO: Fratto on MSNBC – ‘Obamacare’ debate three years later
Visit NBCNews.com for breaking news, world news, and news about the economy
VIDEO: Fratto on CNBC – Cyprus: Where Things Stand
VIDEO: Fratto on CNBC – Fed Keeps Foot on QE Gas Pedal
VIDEO: Fratto on CNBC World – Jack Lew in Beijing
Rest In Peace Google Reader. What’s Next?
By Noah Chestnut, nchestnut@hamiltonps.com, 202-822-1205.
As of July 1, Google Reader will no longer be available to the public. For those unfamiliar with Reader, it is a free, web-based RSS app used to organize and read blogs and news alerts. Reader is an essential tool for journalists, press secretaries, war room directors, researchers and anyone who consumes an above-average amount of media. Twitter’s CEO Dick Costello, who used to work for Google, described Reader as the ideal tool “for information junkies, not just tech nerds.” For those curious as to why Google would shut down Reader, Chris Wetherall, a co-founder of Reader, discusses the history of the Reader project and Google’s prioritization of their social network efforts in Google+.
Where should Google Reader loyalists turn? There are a variety of Reader competitors on the market, but none are as simple, clean and fast as the original. My recommendation is to wait. There are a few talented software companies, such as Betaworks (the team behind bit.ly and the new digg.com), eager to …
VIDEO: Fratto on CNBC World – Jack Lew in Beijing
Point/Counterpoint: Why Senator Brown¹s proposal to cap bank size does not address systemic risk and places Americans at a global disadvantage
By: Patrick Sims, psims@hamiltonps.com, 202-822-1205
When Senator Sherrod Brown (D-OH) discussed his new proposal to break up the largest U.S. banks and place a cap on future growth in a recent interview with Mike Konzecal of Washington Post’s Wonkblog, he misrepresented accounting standards to justify his idea to cap bank size. And the fact is, his overall proposal does little in the way of reducing systemic risk while placing the U.S. financial sector and the American taxpayer at a permanent disadvantage in the global economy. Below are a key counters to his main points.
Point #1: Smaller banks cannot provide the same services as larger banks
Point: “I have yet to hear why 20 super-regional banks couldn’t do a better job than 11 megabanks that benefit from implicit guarantees from the federal government.”
Counterpoint: It’s a misconception that smaller, regional banks would provide this service in the absence of large U.S. banks. If they could, they probably would. The syndicated loan market is a perfect example: In 2012, Wal-Mart received the largest syndicated …