The latest buzzword is SIFI and this particular buzzword can “buzz” right through your checking account without notice. In a recent speech, Fed Governor Jeremy C. Stein at the "Rethinking Macro Policy II," a conference sponsored by the International Monetary Fund, Washington, D.C. on April 17, 2013 made the following statement about large banking institutions:
“Where do we stand with respect to fixing the problem of "too big to fail" (TBTF)? Are we making satisfactory progress, or it is time to think about further measures?
I should note at the outset that solving the TBTF problem has two distinct aspects. First, and most obviously, one goal is to get to the point where all market participants understand with certainty that if a large SIFI were to fail, the losses would fall on its shareholders and creditors, and taxpayers would have no exposure. However, this is only a necessary condition for success, but not a sufficient one. A second aim is that the failure of a SIFI must not impose significant spillovers on the rest of the financial system, in the form of contagion effects, fire sales, widespread credit crunches, and the like. Clearly, these two goals are closely related. If policy does a better job of mitigating spillovers, it becomes more credible to claim that a SIFI will be allowed to fail without government bailout.”
See: http://federalreserve.gov/newsevents/speech/stein20130417a.htm
Does he think that the ultimate depositor isn’t also the taxpayer and that the taxpayer isn’t the ultimate loser of the SIFI bank’s gambling policies that have been allowed to infiltrate the entire financial infrastructure? Does he think there are a bunch of smaller banks isolated from the impact of a SIFI bank melting down? C’mon! Help me somebody! They have been pushing for a fully integrated financial system so they can control the population and now it is poised to bite the on the ______. (please insert your own word)
The systemic risk of the overall system is being overlooked, misunderstood, or just plain misrepresented. Only Our Heavenly Father knows how this will play out. The probability of a Black Swan event is on the rise. The central planners have allowed the system to become too complex to maintain control. None of this is unexpected by Our Heavenly Father. Man’s systems independent of Our Heavenly Father always end up failing. It is only a matter of time.