How risk could jump the Atlantic

Why would the Fed let such a thinly capitalized bank operate in the U.S. despite its “risk to the rest of the financial system?” asked Simon Johnson at Bloomberg.com.

Simon Johnson

Bloomberg.com

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Why would the Fed let such a thinly capitalized bank operate in the U.S. despite its “risk to the rest of the financial system?” Perhaps it thinks Deutsche can help Taunus in a pinch. But given the shakiness of European bonds and U.S. mortgages, “such a presumption now seems questionable, at best.” Our regulators should demand higher capital ratios for Taunus. In times like these, “allowing business as usual is asking for trouble.”

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