Tuesday, May 10, 2011

Quotes of the day: Dodd-Frank in the crosshairs

From Andrew Ross Sorkin:
... going to deeply entrench crony capitalism into the very fabric of our financial system, which I am terrified about. ... companies that are connected to Washington, that curry political favor, will be favored at the expense of companies that do not have their business model revolve around appeasing politicians and making campaign contributions. ... Every bank in the United States has an F.D.I.C. guarantee on the front door, and they’re more than happy to enjoy the economic rents that go with the taxpayer subsidy relating to that guarantee. The governments guarantee should be limited to very narrow risk taking activities. High quality consumer loans, high quality mortgages, high quality corporate loans. We should keep those parts of our financial systems walled off from that part of our financial system that revolves around aggressive risk taking.--Ken Griffin, head of Citadel

... creates more uncertainty rather than certainty. ... I think it could actually accelerate people’s demise rather than stop it. ... Our financial system in America is the envy of the world. We have more skills, capabilities, infrastructure, data than anybody else and people love it and all of a sudden we’ve sort of turned into it’s like a terrible thing — like we should bust it all up into small little pieces and have a bunch of little companies doing it. It doesn’t make any sense to me. With that comes a risk of some giant companies having a problem, and you don’t run your life around a tail event.--Thomas J. Wilson , chairman of Allstate and deputy chairman, of the Federal Reserve Bank of Chicago

... probably not workable.--Raymond W. McDaniel Jr., chief executive of Moody’s

... I think it’s got deep flaws. ... As soon as you institute an insolvency proceeding for a financial institution, if they haven’t run before it started they’re going to think about running very quickly.--Jim Millstein, the former chief restructuring officer of the Treasury Department who oversaw the bailout of the American International Group
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