It seems that most American banks are still in the game of what they call “creative destruction,” and the result has been massive losses for shareholders.
As Bloomberg Businessweek reported in February, “More than half of all U.S. banks have already experienced at least one year of significant restructuring in recent years.
At the same time, the S&P 500 has climbed to a record, thanks in part to a surge in corporate profits.”
Bankers have lost their jobs and their bonuses, their stock has fallen and their loans are on the verge of default.
As of May, nearly 4,000 U.K. banks had $16.4 trillion in assets under management, up from just $12.7 trillion at the end of 2015, according to a report released by Barclays in January.
The losses have prompted a spate of corporate governance reforms across the United States and elsewhere.
The latest of these is a proposal by the U. S. House of Representatives to impose a ban on banks from issuing government bonds that require them to sell certain assets.
“These rules are a direct assault on the taxpayer, and we have a moral obligation to hold our institutions accountable,” said Representative Mike Turner (R-Ohio), a member of the House Banking Committee, during a press conference on May 17.
Bankers are also seeking to overturn a federal law that prevents banks from giving a portion of their profits to the Treasury Department.
That law was passed in 1986, when Congress was considering a bill that would have imposed capital requirements on banks.
Banks have spent billions lobbying for it.
“We will continue to fight this effort until it is defeated,” said Brian Schatz, a spokesman for the Congressional Banking Committee.
This latest effort comes after Congress passed a bill last year that would require banks to make their debt more affordable by requiring them to use debt-to-equity ratios of less than 20 percent.
The Treasury Department estimated that this measure would lower bank debt by $1.8 trillion over the next decade.
As a result, the Treasury has estimated that the average bank will save $6 billion in interest payments in 2020, according a report from the Congressional Research Service.
Banks argue that this reduction in interest rates is necessary to offset the effect of a government bail-out.
But the Treasury estimates that the reduction in government bailouts would add only about $1 trillion to the economy.
In addition, the report found that a 30 percent reduction in capital requirements could mean that a single bank could save $1 billion, or roughly one-fifth of the bank’s total debt.
“If you think about it, we are talking about a government bailout of $8 trillion and an interest rate cut of only 2 percent,” Schatz said.
“The result is that you have to spend almost $2 trillion more to bail out one bank, which is going to lead to more banks being in trouble.”
A lot of these changes have already happened, and they may be coming to an end.
In July, the U of T released a report showing that the UBS Global Business Unit had $8 billion in debt.
The report showed that, in the first nine months of this year, the company had nearly $1 million in total outstanding debt and that “at least half of the company’s remaining cash is tied up in fixed assets.”
As Bloomberg noted, “The company is on track to pay off all of its outstanding debt, and its cash balance will be about $2.5 billion at the earliest.”
“The Bank of America-sponsored loans that the government took out to prop up the UBI and support its financial system were intended to be paid off over time,” said Kevin Murphy, a professor of economics at the University of Waterloo, in a statement.
“But the government has already taken money out of UBS’s accounts.”
“We’re just going to have to wait and see how the government reacts,” Murphy said.
Bank of Montreal CEO Jim Balsillie said that the new measures would only serve to increase the burden on consumers.
“I don’t think there’s any way that it’s going to help consumers,” Balsillo told Bloomberg.
“This is the biggest thing that we’ve seen this year.
There’s been a lot of bad press out there.”
But, as Bloomberg points out, “Banks don’t like the idea of having to pay a bailout to their shareholders, and it’s not like they want to take a hit in earnings.”
The idea that the bailout could increase the debt of a bank by a third is hardly a new one.
Banker Brian Hulse of JPMorgan Chase told Bloomberg that the idea that a bailout would raise the debt “is a false one.”
“When you put a large portion of the taxpayer’s money into a bank, you need to be prepared to go through that process,” Hulse said.
He also argued that the bail-outs “would not increase overall bank leverage, and so there’s no need to go to the bailouts