Also in this playlist...
This transcript is automatically generated
-- they are insured away and -- -- senior vice president of equity research for Roche deal securities and a widely followed Wall Street analyst and radio talk show host Nancy Skinner.
Now -- before we get started I wanna tell you I plan to give you both equal opportunity at this topic because I think it's an interesting line.
-- wanna start with -- -- big banks dangerous.
Well we we saw them how dangerous they -- in the collapse of 2008 absolutely that was.
The problem it was the merging of the banks with the financial institutions.
And insurance industry and the fact that they were gambling with our dollars so we had to bail them out.
That's why big banks are dangerous and they -- and we've taken Dodd-Frank actions to reduce that I still think we need to go further something more like lasting golf.
-- right as -- everything you say not only are big banks such dangerous that that the reality is we need more of them we need bigger banks explain.
Well if you think about it the United States -- suppose fifteen and a half trillion dollars correct.
And by the end of this year to -- close to seventeen trillion dollars.
-- someone has to get that get that money to give to the United States government that's being done by things called primary dealers which tend to be banks.
Now about thirty years ago we with 34 primary dealers in the United States.
Which were American banks right now there -- seven.
And there -- fourteen foreign banks that are operating has primary dealers.
So because the United States is cutting back the size of its banks.
And intends to reduce them further in -- were using more and more foreign banks to raise money to pay the United States debt.
The United States that cannot be paid by a -- credit unions going out.
Raising money it has to be raised by huge banks.
We don't have enough of them.
We are giving the power over the United States treasury.
To foreign banks because for every one American bank.
Raising money for the United States treasury spirit to foreign RX eight of the foreign banks and the European banks.
OK major point here let's go back to Nancy you say banks can be two bit.
Are right how big should they be and who makes the decision about they should stop growing -- they should be broken up.
What we weren't responding mr.
movie's point here known as the easiest to -- in question.
OK OK well but I guess they fit together.
How big they should be -- what should -- what should taxpayers be on the line for and that should be federally insured deposits.
And that -- and not the proprietary.
Trades that are being dead done securities derivatives a sector.
So the agreement is the argument that mr.
movies making about the -- just leading banks to be big so that they can print more dollars to pay -- our deficit is -- it isn't it is completely backwards.
Our dollar is strong based on the wealth of our nation and and that's the good the full faith and credit United States is the basis of why we -- the safe haven in our currency.
So when we have too big to fail banks because were allowing them to gamble and we subsidize their gambling.
The the shaking that says Moody's and others -- As the pointed out.
Downgrades the full faith and credit of the United States and then the value of the dollar declines right now we are though the buyer of last resort in the entire world.
That's why we're strong not that we can print money and have more offices across the world with our banks -- -- they what do you say that.
Well I think that that's a very important point in other words the United States has the dollar as the world's reserve currency.
In order to maintain the dollar as the world's reserve currency we have to have banks all over the world who are supporting the use of the dollar.
If the dollar is not being used by other countries if other countries make the decision as they are attempting to.
At the present time to supplant the dollar with their currencies then we'd lose the world's reserve currency if we lose the reserve currency of the world.
We didn't have to pay back our debt if we have to pay America debt -- environment unless we become an island exactly sixteen billion dollars right now.
Yeah that's out of that's an extra an area.
At Nancy you one of the things that Fisher is calling for here.
Is if you're -- bank CEO and you say I need a bail out you lose your job the board loses their job senior management is out on its key Easter.
Absolutely because that's what all of us regular people out there have to face day in and day out.
And if you if you of that and because they've given them the bailout they've been given their -- one -- right so now be duly warned that if you continue to do these same things you're gone.
That is not -- you just take the vocal role I'm Terry.
The right now they have the lobbyists completely.
-- that taking it into extinction because.
They they are taking it away I would say there's no penalty let's go up -- -- vocal role -- world that's like so complicated I can't my head hurts.
-- the question I had -- out of this really for you was.
If you tell banks they can only be a certain size.
Don't they just go somewhere else don't they just set up headquarters.
In Euro or Asia somewhere else -- they don't have the same rules.
They're already doing that I think two weeks ago JPMorgan announced that it was moving its hope.
Merger and acquisition department -- Hong Kong I've been told by a very large -- banking institutions and it's ready to move.
The most of its trading operations to Singapore.
The banks in New York City and then when I was growing up in New York City vilify big banks in the city and they were at least five.
Big brokerage firms and others to into.
So anyway the point is every major bank in New York is moving people out of New York.
And around the world Citigroup is moving people are around the world bank of -- -- Here last word we spent 200 billion bailing out.
How do we make sure that this doesn't happen again puts its easiest way to do it quickly.
Size doesn't matter Jerry.
And banks -- may be taking deposits in making loans -- financial firms can trade and do all they want without taxpayer dollars so we never have to bail them out that's how we're gonna get our economies salad pay off our -- slowly and keep our full faith and credit of the United States yes and a great job -- different points of view it very difficult conversation thank you so much they can Nazi appreciate it.
You think you are -- if you're fired up about this or any of the issues on the program drop me an email -- at Fox Business stocks.
Filter by section