Barney Frank doesn't get it: Stress tests are just the tip of the iceberg

Posted Apr 16th 2009 9:20AM by Connie Madon
Filed under: Politics, Financial Crisis

We hear the name of Barney Frank quite often. He is Chairman of the House Financial Services Committee. His latest mantra is for more transparency in the recent bank "stress tests."

What is so hard to believe is how naive Barney Frank really is. Doesn't he know that we have an underground banking system that regulators do not even touch. The underground banking system is comprised of all the "off-the-books" transactions like CDSs, CDOs, CLOs and all means of convoluted deals that are losing money and do not even show up on "stress tests." For example, JP Morgan Chase & Co. (NYSE: JPM) is holding $87.7 trillion worth of CDSs somewhere off the books.

The "stress tests" are just the tip of the iceberg. The real problems are to be found in the underground banking system, not in the "stress tests."

Mr. Frank, if you really have courage and want to serve the American people, pass a law forcing banks to put all their transactions on the books. Sooner or later this must be done. We must put an end to the underground banking system forever. This is the only way to clean up the bank messes and put the U.S. banking system on a sound footing.

Again, Mr. Frank, we beg you, pass a law forcing banks to put all their transactions on the books.

Tags: Barney Frank, BarneyFrank, inthenews, jpm, stress tests, StressTests

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Reader Comments (Page 1 of 1)

4-16-2009 @ 12:28PM

Frank the Tank said...

Please, for the love of God Mass. vote this guy out at mid-terms.

4-16-2009 @ 8:22PM

william lindblad said...

One thing about Barney, he only takes comment from his district. I can't say too much for the rest of the House Finance committee, either as I sent enough emails warning of impending disaster and that was two years ago.
Once upon a time I was using a facility and on the door of the stall was these words of wisdom. It said you cannot go here as - you have sent your A-H to Washington. Amen, that sage spoke the truth.
I have yet to figure out whether those that were supposed to be our watchdogs were either asleep or being well fed by another master, to which they felt obligated. No matter, they all should go.
Barney and the entire committee and Chris Dodd and the rest of the Senate Banking committee. It will not happen as the public problem is that we do not engage ourselves in the activities of those that we elect. Woe upon the pluribus unum, and that woe, is your own doing, so don't whine, just stand in the unemployment line.