Here it Comes Again...
Is our congressmen learning?
To recap: fewer, bigger banks bearing disproportionate share of the risks. Higher leverage. No oversight. Tick, tick, tick...
While derivatives use among U.S. companies is widespread, an "overwhelming majority of the exposure is concentrated among financial institutions," according to the rating agency's review of first-quarter financials.
Concentrated, in fact, among a mere handful of financial-services giants. About 80% of the derivative assets and liabilities carried on the balance sheets of 100 companies reviewed by Fitch were held by five banks: JP Morgan Chase, Bank of America, Goldman Sachs, Citigroup, and Morgan Stanley. Those five banks also account for more than 96% of the companies' exposure to credit derivatives.
No problem, right? After all, in order to get tarp money and access to the fed reserve window, Goldman had to become a bank holding company and do all those boring things that banks used to have to do. Ordinarily, that would be true. Except they got a waiver.
To recap: fewer, bigger banks bearing disproportionate share of the risks. Higher leverage. No oversight. Tick, tick, tick...
