judgment by bankers helped get us into this crisis. They relied too much on borrowed money, lent too freely to shoddy customers and got taken in by their own sophisticated financial models.
So you would think the last thing anyone would want to do is rely more heavily on their judgment in the hope they’ll do better next time.
Unless, that is, you’re a banker. Many believe one way to prevent today’s troubles from recurring would be to give banks more wiggle room over how much money they put aside to cover loans that might go bad. That would let them build up rainy day funds when times are good so they can bolster profit during slumps . . .
Consider that between 2003 and 2007 Citigroup Inc. paid out about $44 billion in dividends and about $22 billion buying back stock. The combined outlay is about four times more than its current market value, and much more than what the government has shelled out to keep the bank afloat.
Remind me again why we are all on the hook to the tune of $300 billion for these idiots?
Source: Sexing Up Books Isn’t the Answer for Banking Woes David Reilly Bloomberg, Feb. 19 2009 http://www.bloomberg.com/apps/news?pid=20601039&sid=aoDAkaaW0y9c
Originally published at The Big Picture blog and reproduced here with the author’s permission.