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Originally Posted by who  John Mack certainly needs the stability of the core deposit base at Wachovia. All investment banks would like to have that but if the regulators do their job they will create a firewall between invest banking and retail banking operations in any firm that engages in both businesses. After all if because of the wheeling and dealing of investment bankers caused the entire firm to fail, the FDIC would be on the hook for depositors losses. |
In all the exitement you may have missed my post 400, here:
http://teakdoor.com/us-domestic-issu...tml#post759878 (A note of caution for those with deposits in US Banks)
The FED have just abandoned Section 23A, which is the 'firewall'. Mt comment in post 400:
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Also, not good. Not good at all. Section 23A is what prevents the money held by a retail (i.e. high street) bank on behalf of its customers from being pissed away by an investment bank that is part of the same group. Normally an exemption has to be applied for and is subject to strict controls and limits. Now EVERY U.S. bank automatically gets one until January 2009.
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