From: Max Keiser
by Ellen Brown
One thing to be said for the women now
heading the Federal Reserve and the IMF: compared to some of their
predecessors, they are refreshingly honest. The Wall Street Journal reported on July 2nd:
Two of the world’s most powerful women of finance sat down for a lengthy discussion Wednesday on the future of monetary policy in a post-crisis world: U.S. Federal Reserve Chairwoman Janet Yellen and International Monetary Fund Managing Director Christine Lagarde. Before a veritable who’s-who in international economics packing the IMF’s largest conference hall, the two covered all the hottest topics in debate among the world’s central bankers, financiers and economists.
Among those hot topics was the runaway shadow banking system, defined by Investopedia
as “The financial intermediaries involved in facilitating the creation
of credit across the global financial system, but whose members are not
subject to regulatory oversight. The shadow
banking system also refers to unregulated activities by regulated
institutions.” Examples given include hedge funds, derivatives and
credit default swaps.
Conventional banks also engage in “shadow banking.” One way is by
using their cash cushion as collateral in the repo market, where they
can borrow to invest in the stock market and other speculative ventures.
As explained by Bill Frezza in a January 2013 Huffington Post article titled “Too-Big-To-Fail Banks Gamble With Bernanke Bucks”: MORE
No comments:
Post a Comment