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Business/Finance See other Business/Finance Articles Title: Greenspan: Taxpayers on the Hook to Rescue JPMorgan in Crisis Greenspan: Taxpayers on the Hook to Rescue JPMorgan in Crisis Wednesday, 14 May 2014 08:07 PM Former Federal Reserve Chairman Alan Greenspan said JPMorgan Chase & Co. is akin to Fannie Mae and Freddie Mac because taxpayers would shoulder the burden of its rescue in an emergency, rather than let it collapse. JPMorgan, the nation’s largest bank, is an example of implicit government guarantees not measured in the nation’s official public-debt statistics, Greenspan, 88, said Wednesday at a forum in Washington organized by the Peter G. Peterson Foundation. The reality is that the government would prop up many financial firms and other companies if needed, he said. “JPMorgan is a Fannie Mae-, Freddie Mac-type of institution, because they are indeed too big to fail, and taxpayer monies will come in behind them to hold them up if necessary,” said Greenspan. He sat on New York-based JPMorgan’s board before his appointment to Fed chairman in 1987. Housing financiers Fannie Mae and Freddie Mac, which buy loans and package them into securities, were taken into government conservatorship during the financial crisis and received $187.5 billion in taxpayer funds to stay afloat before a market turnaround propelled them to record profits. The pair now back about two-thirds of new U.S. home-loan originations. U.S. debt statistics should include a “very significant part of the financial institutions,” Greenspan said. Because the government also bailed out automakers and insurer American International Group Inc., the public debt includes “a lot of the nonbanking as well,” he said. Bailout Unnecessary JPMorgan Chief Executive Officer Jamie Dimon, 58, has said his bank didn’t need the $25 billion it took from the Troubled Asset Relief Program, a bailout package designed to rescue major U.S. banks at the height of the financial crisis in 2008. The firm repaid the money. “We did not borrow from the Federal Reserve except when they asked us to,” so that other banks wouldn’t be tarred by using the funds, Dimon said in a 2012 hearing before the Senate Banking Committee. Amy Bonitatibus, a company spokeswoman, declined to comment on Greenspan’s remarks Wednesday. The possibility that the U.S. would need to support JPMorgan in a future crisis helps explain why lawmakers take interest in missteps such as the firm’s loss of more than $6.2 billion on botched derivatives trades in 2012, Greenspan said. Congress repeatedly called executives to testify about the bets, which had been placed by a trader known as the London Whale because they were so big. During Greenspan’s time at the bank, “we had a lot of what we would now call ‘London Whales,’ where there was this big major loss that appears on the books of JPMorgan,” the former Fed chairman said Wednesday. “It was essentially an issue between the directors and the management. It never got outside of that twosome. Today, you get that sort of thing and Jamie Dimon gets called up to the Senate.” Read Latest Breaking News from http://Newsmax.com www.moneynews.com/StreetT...4/id/571400#ixzz31ow1ujQv Poster Comment: Just what we need, another bailout. :( Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 1.
#1. To: BTP Holdings (#0)
As it should be. Slaves are expected to support their masters.
There are no replies to Comment # 1. End Trace Mode for Comment # 1.
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