This is good, back to utility banking

Reader comment on: The Bair-Miller-Moore Haircut

Submitted by Lyle (United States), Nov 20, 2009 21:18

This would banks back to making loans based upon deposits, and discourage more the concept of lending to the holding company. Since the holding company securities holders took a 100% haircut at WaMu, this should be obvious to all, and if Citi had gotten Wachovia the same would likley have happened. Today if a Bank Holding Company's bank is taken over by the FDIC the question would be what would be left for those who have obligations to the holding company. There would be less profit in banking as it would push us back to the banking of the 1950's. If no one lends to holding companies then perhaps they will wither away also.

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