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Federal Reserve to write new rules preventing a run on banks

Global regulators need more policy tools to counter the risk of devastating bank runs and should have powers over a wide array of market participants, U.S. Federal Reserve Governor Dan Tarullo said on Friday.

"There is a need to supplement prudential bank regulation with a third set of policy options in the form of regulatory tools that can be applied on a market-wide basis," Tarullo said at a conference on shadow banking.

He also detailed the Fed's plans to write new rules that would make it less attractive for banks to raise cash in short-term wholesale funding markets, a key factor in the collapse of Lehman Brothers in 2008.

Banks that substantially rely on short-term funding in the interbank market should be required to hold more capital on top of what is already mandated by international rules under the so-called Basel III pact, Tarullo said.

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Rule No 1 -All your bucks belong to us.


Free includes debt-free!

Rule no. 2:

You belong to us.


Fewer $$$ will be lent and at higher rates. It will create an artificial spread widening effect. Banks will need to hold on to more capital and the spread between their fed funds rate and their lending rate will widen.

In other words, they will make more money per dollar lent. Fewer dollars will be lent. Prepare for stagflation on top of our current situation.

robot999's picture


We must make it more difficult for Americans to stop us from ROBBING them.

"Government is the entertainment division of the military-industrial complex". - Frank Zappa


I thought the same thing. They are thieves who want to make sure they can take more and make sure we can't stop them.

End the Fed!!