Did SEC in 2004 change leverage rules from 10:1 to 30:1, or 32:1?

[Festivito]

(This is a banking question about how much the bank can lend when they have actual cash in the bank vaults.)

I recall a TYT(Young Turks) video with Cenk saying this. I did not save a link, now I cannot find it. I'd prefer some news report on it, but no luck there either yet.

It seems we were much more extended than that. But, I was wondering if there really was some ruling.

Anyone?

[natrat]

1. bill clinton started it off with the financial svcs modernization act

[Festivito]

3. Yup, he signed the veto-proof bill that was started by 3 Republicans.

Thanks. I just can't blame Clinton for starting it sooner than a pocket veto later so he might have time in his administration to still correct it before he left office.

Cenk was talking about something from 2004 though.

[antigop]

2. Here ya go... try this link...

http://www.nytimes.com/2008/10/03/business/03sec.html

Many events in Washington, on Wall Street and elsewhere around the country have led to what has been called the most serious financial crisis since the 1930s. But decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agency’s failure to follow through on those decisions also explains why Washington regulators did not see what was coming.

On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.

They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.
...
Over the following months and years, each of the firms would take advantage of the looser rules. At Bear Stearns, the leverage ratio — a measurement of how much the firm was borrowing compared to its total assets — rose sharply, to 33 to 1. In other words, for every dollar in equity, it had $33 of debt. The ratios at the other firms also rose significantly.

[Double T]

4. There should be no wonder why we are in such irreversible trouble.

The banks were in trouble and in typical 'bank think' brilliance they solved their problem by getting even deeper in trouble. WhenTF are we going to STOP letting the banks rule our lives, rule our economy and rule our financial system; THEY are ALL a bunch of crooks! Chris Dodd is totally worthless!

[Festivito]

6. Hey, we're Americans. Nothing is impossible.

Don't like to jump in, but, we can reverse this. It will be painful no matter what we do. Nothing, the little we are doing, or the big look-at-it-all and withstand the crying and gnashing of teeth of the class warfare it will unleash.

[Festivito]

5. That's it! Thank you, thank you, thank you.

Amazing what can happen when one votes for crooks to appoint the rule makers.

April 28, 2004 is a date that should live in infamy.

[Festivito]

7. Will the Obama SEC be able to look at where our 2T$ went?

The 2004 decision for the first time gave the S.E.C. a window on the banks’ increasingly risky investments in mortgage-related securities.

/snip/in exchange for the relaxed capital rules, the banks volunteered to let the commission examine the books of their parent companies and subsidiaries.

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Such could be interesting.

[lovuian]

8. here ya go

kick