Marcin,I will chime in on the thought that these points are (at this point) well-appreciated, including F).Here is how the regulators see it: Volcker committee recommendationsThe question is, can you significantly advance the argument beyond what they have done,or make a case for some fatal flaws, fundamental omissions, etc? Another topic critique is that nobody forces a commercial bank to buy securities beyond liquid Treasury stuff,AFAIK. They can always take in deposits, park the money in short-term Tsys, and then try to really loan out the money to homebuyers, businesses, etc.. If they do make such a loan, nobody forces them to sell it -- theycan keep it in their portfolio. Let's say they make loans to buy houses. Now you canmake the same laundry list a)-f) of why it is difficult to truly value that in-house portfolio of loans: a) different appraisals, b) different data sources, ..., f) illiquid markets, etc. Well, so what? That is the nature of banking. The question is: how do you deal with all those issues in a reasonable way? One last point. In the US, there about 8100 insured banks -- so far during this financial crisis,140 have failed -- 25 in 2008 and 115 in 2009 to date. While the failures/forced sales have certainly included a few big players and other very big guys have needed needed lifelines, the survival figures also suggest that there are *many* conservatively run (midsize and smaller) banks.So, perhaps you may want to research how the silent majority successfully managed their risks.
Last edited by Alan
on November 8th, 2009, 11:00 pm, edited 1 time in total.