When Is a Bank Not a Bank

Paul Krugman helps me understand something that had been puzzling me -- how can subprime lending problems be causing such widespread financial issues? He says we're seeing a kind of bank panic. Ever since the Depression, we've gotten used to their not being bank panics thanks to the Federal Deposit Insurance Corporation. But "consider the case of KKR Financial Holdings, an affiliate of Kohlberg Kravis Roberts, a powerhouse Wall Street operator."

KKR Financial raises money by issuing asset-backed commercial paper — a claim that’s sort of like a short-term C.D., used by large investors to temporarily park funds — and invests most of this money in longer-term assets. So the company is acting as a kind of bank, one that offers a higher interest rate than ordinary banks pay their clients.

It sounds like a great deal — except that last week KKR Financial announced that it was seeking to delay $5 billion in repayments. That’s the equivalent of a bank closing its doors because it’s running out of cash.

Since KKR and similar firms aren't technically "banks" the systems in place to prevent bank panics don't apply to them. But they function like banks. And the mortgage meltdown has made people skittish generally, creating panics in areas of the economy that aren't necessarily closely related to the subprime mortgage market.

The good news, it seems to me, is that when the dust clears it should be relatively easy to fix this problem. The programs aimed at preventing panics at traditional banks are, after all, highly successful. Maybe I'm wrong, but it doesn't seem like it would be hard to devise a way to extend the system. In the interim, though, who knows.

Comments

We need to be careful here. Remember the S&L mess. In the absence of meaningful regulation (which is currently the case, as far as I can tell, in the finance industry) deposit guarantees just become an open invitation to financiers to play Monopoly with the government's money. There has to be regulation to prevent that before guarantees are made, and what do you think the odds are of that happening in the current political climate? Remember your own wise words about how successful the GOP continues to be at empowering the wealthy at everyone else's expense.

Posted by beckya57 | August 20, 2007 1:51 PM

I don't claim to be an expert economist, but I don't think this problem can be solved as easily as you think. The reason money markets pay more than FDIC insured accounts is because they are not FDIC insured. You get slightly more return because you are taking on slightly more risk. The financial industry is very competitive and there will always be people who are willing to take on slightly more risk in order to get incrementally better returns on their cash. So there will always be uninsured cash repositories like this.

Posted by A.L. | August 20, 2007 1:51 PM

MY:
Are you suggesting a government bailout of Henry Kravis(he's the head of KKR)? If you are, you won't be a good standing member of the DFH club anymore.

Posted by Joe Klein's conscience | August 20, 2007 1:53 PM

I think becky is talking about moral hazard, which was my first concern when thinking about this. You don't want to FDIC-insure things that are too much more risky than banks.

Posted by Neil the Ethical Werewolf | August 20, 2007 1:54 PM

Matt, you seem like a smart guy so maybe it's your youth that has you in a fog. The 1st rule of fixing any problem: Nothing is ever as easy as it looks. Throw in a little Murphy and that forever nettlesome "unintended consequences" factor and I dare say reforming the banking/investment laws would sort of rank up there with invading Iraq.

Posted by steve duncan | August 20, 2007 1:56 PM

Didn't they repeal the Glass-Steagell Act during the Clinton administration, which had precluded firms from operating banks and other sorts of financial institutions? At the time, we were assured this was necessary to "modernize" financial services, but I wonder if it has something to do with the current mess.

Posted by Dilan Esper | August 20, 2007 1:58 PM

I'm not very sophisticated in this area, but I question whether your proposed solution would work. If the investors that used these institutions wanted a bank they would put their money in a bank. Presumably, they did not do so because the returns are higher if you are willing to forgo the protections and regulations associated with banks. If KKR and others like it are subject to those regulations, they will just be another bank, and those looking for higher risk and better returns will just find another place to invest.

Posted by Leo | August 20, 2007 2:05 PM

Er, I was beaten to the punch by like ... everyone.

Posted by Leo | August 20, 2007 2:07 PM

On a related note, I posted this as a comment at MaxSpeak not realizing the thread was dead ... perhaps there is a stray economist 'round here who can dispatch my economically illiterate ramblings dealing with the liquidity crisis (that they sometimes used to call a "money crunch")?

Money is a medium of exchange, ain't it?

Consider an economy. Instead of using money, it's based on shares and kind of an inverse Marxism: "to each according to his ability and from each according to his needs". Everybody piles in all their production -- goods and services -- into a big pot. And then, based on how valuable your production is, you get a certain number of shares of items in the pot. Of course, different items earn their maker (as well as require to obtain) a different number of shares.

We know that, given our fabled high productivity, in this pot there are more than enough of at least the basics, if not all creature comforts, to go around. So, when people use their shares to divvy up the pot, even if some people have more shares than others, the vast majority of people can have what they need from the pot and still have shares left over. And those who might wish to have additional items (say to start up a business or something) can borrow shares from those who have extra. But the set up, anyway, is such that, since we've given shares out according to productivity, in total there are enough shares to go around to purchase everything. And since we are more than productive (although perhaps not in an environmentally sustainable way, but as Keynes said "in the long run we're all dead" ... yes, I rhymed, I'm a poet and I do know-it), when everything is purchased, as long as the shares are reasonably distributed, no-one is wanting given the shares they have.

But these shares are exactly isomorphic to money, are they not? And yet, everyone seems to be in debt. If we converted to shares as described above, only a limitted number of people would be in debt for specific reasons, yet in our isomorphic system, somehow there doesn't seem to be enough money (the liquidity crisis) to go around. Riddle me [an economic illiterate, I reckon] this: how is it possible that so many of us are in so much debt when we produce more than enough to meet our needs (e.g. in a share-based/bartering system)? Where is the extra money going?

The current situation makes one turn into an agrarian reactionary asking questions like "is our monetary economy worth it?"

Posted by DAS | August 20, 2007 2:10 PM

I don't have access to NYT Select, so I don't know if Krugman mentions this, but it's important to note that the terms of the ABCP issued by KKR (actually special purpose vehicles managed by KKR) allow for this sort of extension in precisely these sorts of market conditions. A large part of the problem is that investors have naively assumed that extendible CP would never be extended. Now they know different and they don't want to buy extendible CP any more.

Another reason for widespread "skittishness" is that these ABCP vehicles are supported by liquidity lines from mainstream banks. When vehicles like KKR's, or Coventree in Canada, or IKB's in Germany, have trouble raising funds, then they have to draw on those liquidity lines, which can in turn cause liquidity problems at the highly rated banks. Exposures that are more or less nominal in good times can become solvency threatening in bad times.

Posted by Ginger Yellow | August 20, 2007 2:13 PM

since most people have already commented on how hard it would be to "fix" the problem, i'd like to turn to "when the dust settles."

as in, when will the "dust" settle? right now, there is a larger market than i realized built around leveraged bets on shoddy mortgages. that "dust" is going to take a while to settle.

and then, there is a general re-thinking of whether credit standards have been allowed to deteriorate (probably), and that "dust" is going to take a while to settle.

and then, there's the rock and hard place the fed finds itself in, where easing the fed funds rate may not actually do much (krugman references this) but it does expose us to currency risk, inflation risk, and higher long-term interest rate risk. that "dust" is going to take a while to settle, too.

i think, at this point, matthew's position is that this is the unwinding of an asset bubble, but actually, thanks to securitization, it's much more than that.

PS. no, i don't think the world is coming to an end, but i've long said that the logical outcome of bush league economics is stagflation lite....

Posted by howard | August 20, 2007 2:20 PM

If you google the name and date of any Krugman article, you will find it shortly.

Posted by Casey | August 20, 2007 2:23 PM

All we need is dereform, de-deregulation, and reregulation. Simple.

Posted by John Emerson | August 20, 2007 2:29 PM

Companies like KKR Financial aren't lending money to you and me. They're securitizing things like accounts receivables at auto finance houses or unsecured credit card debt. It works like this, they take a group of assets that have a principle and interest payment, apply some mathematical models to approximate a default rate, add a couple of ticks to it and float a bond with the proceeds going to the issuer and bondholders getting the steady return of interest on the bond along with either the profit or losses that bond has in the secondary market. When KKR says they can't make their interest payments, they are in effect saying that they need to renegotiate the terms of their agreements. The alternative is to default on the bonds. Bondholders are probably not too keen on the default option because they will basically get a bunch of assets that are underperforming and will be hard to sell, at least at a competitive price. KKR will likely find a way to work it out with their counterparts. The firm itself (KKR Finance, not KKR et al) hardly ever survives these things. Once a firm defaults or comes very close to it, the people they once relied on as costomers, hedge funds, big asset managers, pension funds, private equity funds, will find more reliable lenders. It's a sign of the overall credit crunch. The street is tightening their lending practices and forcing the lesser players out of business. We don't what to be bailing any of these type of players out. They need to go out of business if they can't compete in the new environment.

Posted by ny nick | August 20, 2007 2:30 PM

It's scary times like these that I'm glad I have no assets to lose.

Posted by Gus | August 20, 2007 2:34 PM

Not easy at all. All this mortgage-backed debt is used to provide capital for global business expansion. The loans have been bought and sold so many times--and so quickly--that it is virtually impossible for the government to impose liquidity requirements on any one institution in case the loan defaults. I don't know how you get a handle on that.

But the above is not a problem if the mortgages are sound to begin with. The answer is for government to act at the point where it can be most effective--when a prospective homeowner applies for a mortgage. Get serious about borrowing and lending requirements, and crack down on unscrupulous lenders. That would be far easier than trying to chase loan owners around the planet.

Posted by Claudius | August 20, 2007 2:41 PM

"KKR Financial raises money by issuing asset-backed commercial paper — a claim that’s sort of like a short-term C.D., used by large investors to temporarily park funds — and invests most of this money in longer-term assets. So the company is acting as a kind of bank, one that offers a higher interest rate than ordinary banks pay their clients."

You're having conceptual problems because Krugman is having conceptual problems. Having outstanding commercial paper doesn't make you a bank. Almost every major corporation has commercial paper in the market - if that makes you a bank, then pretty much everything would be a bank.

KKR's commercial paper activities are drastically different from a CD or bank account. KKR cannot engage in fractional reserve lending (unless it actually becomes a bank). All of the customer's commercial paper is either in cash at KKR's bank accounts, or in investments. The value of those investments can decline, of course, which would lower the value of KKR's commercial paper. But there was always the risk of that.

That's not a bank run. Since banks can engage in fractional reserve lending, they lend out many multiples of their deposits. If a relatively small number of their loans go belly up, there will be no deposits left at all - zero (except for the FDIC insurance, of course, where the government repays the bank customers). That's not the case here (unless KKR decided to become an actual bank) - the owners of KKR Financial commercial paper might lose precisely the amount of losses in the underlying portfolio (a portfolio which is the size of their commercial paper), not many times their initial investment.

Posted by burritoboy | August 20, 2007 2:42 PM

"All this mortgage-backed debt is used to provide capital for global business expansion."

Well, no, not the mortgage-backed debt (which, naturally, finances real estate transactions). There are CDO's composed of business loans, and those do provide expansion capital. I don't know what the recent performance of those CDOs are, but the problem has been with real estate debt on residential homes, not business loans (unless they were collateralized by houses, which does occur, but isn't that common).

Posted by burritoboy | August 20, 2007 2:51 PM

"But they function like banks."

No, they function like every other issuer of commercial paper, which has been around for hundreds of years. A bond default is not a bank run.

Posted by burritoboy | August 20, 2007 2:59 PM

burritoboy

well, i doubt krugman is actually having conceptual problems with this - he's trying to explain something in 700 words or less.

and, the fact that companies like KKR borrow short and invest long does, in fact, make them "like a bank" regarding the term-structure of their balance sheet.

anything that makes their short-borrowing less attractive is trouble, just like anything that makes short-borrowing by banks trouble.

while KKR doesn't have the bank-run problem of fractional reserves, it does still have serious term-mismatch problems, so, it can look very much like a bank-run when holders of their commercial paper decide to move in a herd.

Posted by josh bivens | August 20, 2007 3:05 PM

Agreed, these are horrible, horrrible times. Got to reregulate, strangle every third hedge fund manager, and blah blah blah. Why, year to date, the Dow is only up about 5% and the S&P only about 2%.

Posted by ostap | August 20, 2007 3:05 PM

Re Matthew's comment " The programs aimed at preventing panics at traditional banks are, after all, highly successful."
------
As someone else pointed out, Glass-Steagell Act was deleted during the Clinton administration.

But there is an additional problem no one's pointed out yet. Because of bank runs during the Great Depression, We used to keep banking broken up at the STATE level. That is, we had LOTs of banks. So if things crashed and burned in any one industry or area of the country, the damage was pretty much limited. As with water compartment doors on a ship.

That's been done away with. We NOW have MUCH larger, integrated banks that operate across much of the United States -- and hence could pull the whole country down with them.

Back circa 1991, some top economists ( Martin Feldstein, Benjamin Friedman, Paul Krugman, Lawrence Summers, Paul Volcker,etc) got together and look at what could really smoke the US economy.

Their conclusion was that the Fed could handle most problems by printing money or lowering interest rates.

There WAS one situation that could bring on Armageddon -- as it did in 1930: A run on the dollar occurring at the same time as the US is entering a deep recession.

In this case, the Fed cannot cut rates/print money to stimulate the economy because doing so would drive the exchange value of the dollar lower, encourage "capital flight" out of the USA (a la Argentina and Mexico) and make the recession deeper.

To some extent, China has partially replaced the Fed as the "lender of last resort". If China decides to pull the plug --i.e. sell her holdings of US Treasuries during a US recession -- then we could be screwed.

One thing that does help us is that our debt held by foreigners is stated in our currency --i.e., in US dollars. This is better than the case of Argentina's debt being held in US dollars at the same time that Argentina's currency was falling rapidly in value relative to the dollar.

Posted by Don Williams | August 20, 2007 3:11 PM

(ssshhh, but if you look in delong's comments, you'll find the a*****e.)

Posted by jerry | August 20, 2007 3:13 PM

"and, the fact that companies like KKR borrow short and invest long does, in fact, make them "like a bank" regarding the term-structure of their balance sheet.

anything that makes their short-borrowing less attractive is trouble, just like anything that makes short-borrowing by banks trouble."

But having a term mismatch doesn't make you a bank. Lots of entities have such mismatches, and it doesn't make them banks (unless we should just use the word "bank" for everything). It just makes them borrowers with a potential problem.

"i doubt krugman is actually having conceptual problems with this - he's trying to explain something in 700 words or less."

While I don't think Krugman himself was having conceptual problems, his article led Yglesias, for just one, down the wrong path, analogizing holders of KKR Financial paper to depositors when those holders and KKR properly see themselves as investors.

Posted by burritoboy | August 20, 2007 3:56 PM

"When KKR says they can't make their interest payments, they are in effect saying that they need to renegotiate the terms of their agreements."

This isn't what's happening, though. KKR's vehicles issued extendible CP. The original terms of the CP allow them to extend the maturity under certain circumstances. They still have to pay the investors back at a certain point, but the idea is that it gives some breathing room when there is a liquidity crisis and the CP can't be refinanced immediately. The question is whether they will be able to roll it when the final maturity comes around. If not, they will have to liquidate the underlying assets, distressed market levels, which may not be enough to redeem all the CP. See here for Fitch's rating action.

"and, the fact that companies like KKR borrow short and invest long does, in fact, make them "like a bank" regarding the term-structure of their balance sheet."

This assumes that the CP and the underlying assets are on KKR's balance sheet. I don't know the full details of the KKR vehicles, but it's by no means certain that they are. These ABCP vehicles are consolidated on the balance sheet of whichever institution(s) provide the programme wide credit enhancement. This is often a third party.

Posted by Ginger Yellow | August 20, 2007 3:58 PM

Re: Didn't they repeal the Glass-Steagell Act during the Clinton administration

I think it was repealed a long time before that. 70s maybe? Anyone know?
But anyway we are not talking about deposit banks here which are FDIC insured. We are talking about investment banks which were never prohibited by any regulation.

Posted by Jonf | August 20, 2007 4:03 PM

"If China decides to pull the plug --i.e. sell her holdings of US Treasuries during a US recession -- then we could be screwed."

China holds only 400 billion out of the just under 9 trillion dollars of outstanding US public debt - 200 billion less than Japan holds. And plenty of foreign governments have immense holdings in US Treasuries - the UK has nearly 200 billion, Brazil 94 billion, Luxembourg 63 billion, offshore money centers 50 billion, etc.

Posted by burritoboy | August 20, 2007 4:08 PM

If we didn't have a budget deficit, bb, then China selling off U.S. debt wouldn't be a problem.

Since we do have a rather large budget deficit, we would have a very large problem...the U.S. government would have to compete with its old debt when trying to raise new money.

Posted by alphie | August 20, 2007 4:20 PM

burritoboy, while i don't think the percentages favor the chinese exercising their power, the fact is that the chinese are the holder at the margin (are you sure about your numbers, btw? the last time i recall reading up, i thought the absolute amount was higher) with a geopolitical incentive to inflict a certain degree of pain upon the US economy.

and if (i underline the if) a big buyer turns into a seller, then do we have herd instinct selling?

but we digress, of course....

Posted by howard | August 20, 2007 4:41 PM

bb

i found the krugman analogy servicable enough to get at the root issue: mismatched balance sheets mean you (or, KKR) can have a financial crisis even w/o underlying assets being rotten.

since the overall question was "how can finance houses w/o lots of rotten sub-prime mortgages on the books be in trouble", this did a pretty good job for me.

note that i have no idea (as ginger yellow points out) whether or not KKR's assets are on-book or not, or, whether they're healthy or not. but, i do think the question of how an otherwise healthy financial house could be in trouble if the market gets jittery is an interesting one in and of itself, and, one the 'bank-run' analogy (tho far from perfect) deals with decently enough.

Posted by josh bivens | August 20, 2007 4:58 PM

I think the key insight is that wannabe banks create money by the simple act of lending, just like real banks would.

But real banks know there's a limit to how much money they can create without causing inflation. Real banks know how much cash they need to have on hand to stay open. Real banks know how expensive a mortgage their borrowers are likely to pay back.

Not being subject to reserve requirements and other annoying bank rules, the wannabe bankers created way too much money. This caused massive housing inflation, which fed back upon itself to form a bubble.

The bubble caused wannabe bankers to vastly overestimate borrowers' ability to repay. So when the bubble burst, the wannabe bankers didn't have nearly enough cash on hand.

So now, it's a global macroeconomic crisis. Central banks are desperately creating more money to compensate for all the wannabe bankers pulling out at the same time.

This, incidentally, is the case for government regulation. Not because we really care whether Edna Mae from Minneapolis read the fine print on her super double bonus option ARM. A bunch of amateur bankers caused a global crisis that threatens to plunge the world economy into recession or worse.

Posted by Jalmari | August 20, 2007 5:04 PM

"I think the key insight is that wannabe banks create money by the simple act of lending, just like real banks would."

The act of lending doesn't create money. Fractional reserve lending creates money.

Posted by burritoboy | August 20, 2007 5:30 PM

"(are you sure about your numbers, btw? the last time i recall reading up, i thought the absolute amount was higher)"

Those are Jun 2007 figures from the Treasury Dept. You could add in the Hong Kong figures into the PRC ones, which would add another 60.5 billion.

"with a geopolitical incentive to inflict a certain degree of pain upon the US economy."

But there are also plenty of actors who would want to undermine China, whether that would be India, Taiwan or Japan.

Posted by burritoboy | August 20, 2007 5:36 PM

JonF:

http://en.wikipedia.org/wiki/Glass-Steagall_Act

You are wrong on both counts. The Act was repealed by Gramm-Leach-Bliley, signed by Bill Clinton. And the law kept investment banking from commercial banking separate. Now, the same firms can play both roles.

Posted by Dilan Esper | August 20, 2007 5:36 PM

"mismatched balance sheets mean you (or, KKR) can have a financial crisis even w/o underlying assets being rotten."

Sure, but it's a very common problem, and one that the financial markets have a lot of now-commonplace solutions for. The only problem that an institution in that situation has is if their underlying collateral is very difficult to value - which does happen in a wide variety of environments and situations. So, KKR can solve the problem either by injecting equity or by showing potential lenders/investors what the underlying assets are. (That doesn't mean KKRF CP holders won't take a loss, but they will know what that loss is). Which is not any different from what any other troubled firm would do - it has little to do with an idea that KKR is "like" a bank.

Posted by burritoboy | August 20, 2007 5:45 PM

According to Fitch, the assets in question are AAA rated mortgage backed securities. In all but a far worse housing market downturn than we're in now, the most likely way CP investors are going to lose money, ironically enough, is by refusing to refinance and forcing a liquidation well below par. Of course, the people who lose money may not be the same ones refusing to refinance.

Posted by Ginger Yellow | August 20, 2007 7:25 PM

Good work Burritoboy

No, being leveraged and "borrowing short and lending long" are not psuedobanking

pretty much all businesses that can do both of these things do so

This is a typical asset/debt unwind (one man's ceiling is another man's floor)

The Fed is supposed to manage panics and manage the money supply the notion that their actions should be limited to "banks" is silly in this day and age

Now as to you fools who are blaming Bush and lack of regulation, many of us recall the Clintonistas twisting banks and lenders arms to make home loans to the "underserved" Subprime - like the S&Ls - was a democrat tar baby, it just didn't stick to them

Posted by Jozef | August 20, 2007 7:58 PM

bb

firms' term-structure mismatch turning into a full-blown crisis is actually not a particularly common problem at the macro level (say not common = once a decade or less).

it usually takes a lot more than just maturity mismatches - like some new set of news that spooks investors - like the sub-prime mortgage meltdown.

the question, again, was why would people panicking about the sub-prime market cause firms w/o much sub-prime debt on their balance sheet to be endangered?

the answer is that term-structure mismatches make many financial firms subject to serious trouble when the entire market gets jittery/uncertain about underlying asset values.

you may find this uninformative, but, it's news to lots of people.

Posted by josh bivens | August 20, 2007 9:25 PM

Re: The bubble caused wannabe bankers to vastly overestimate borrowers' ability to repay.

This is the part I don't understand. It should have been staringly obvious to anyone who can add and subtract that a lot of people would not be able to pay the increased payments when their ARMs reset. Was everyone so irresponsibly focused on the short term they didn't care about the long term? Or not even the long term, since a couple of years is not very long term.

Re: You are wrong on both counts.

I may be wrong about the Act and admitted that I did not know for sure (though in fact portions of it were repealed, or rendered moot, earlier on), but investment banking has been around a long time and was not created in the 90s. And yes, investment banking has involved risky deals for a long time-- there is no such thing as a perfectly safe investment (though T-bills come closest). I actually find it a bit amusing to watch the sudden shock and the low-grade paranoia (some of it on view in this thread) as people rediscover risk. Good grief, it's been how long since the last time the financial world laid an egg? Six years? 20? Too brief an interval for such amnesia!

Re: Subprime - like the S&Ls - was a democrat tar baby, it just didn't stick to them

Subprime loans existed long before Bill Clinton took his first presidential oath. There has always been a market for lending to people with shaky credit-- and there should be, as some of these folks do have solid incomes and just suffer an Act of Fate (say, a medical bankruptcy) on their credit report. The problem is not with the basic concept but with the fact that no standards at all were applied during the bubble years.

Posted by JonF | August 20, 2007 9:49 PM

Re Steve Duncan: "The 1st rule of fixing any problem: Nothing is ever as easy as it looks. Throw in a little Murphy and that forever nettlesome "unintended consequences" factor and I dare say reforming the banking/investment laws would sort of rank up there with invading Iraq."

Which is exactly why in order to understand what is happening today we need to go back to the last round of bank crisis after which those bank regulators making a living in Basel came up with the “brilliant” idea of forcing the markets to in so many ways follow the advice of the credit rating agencies.

And so now we have it. It was primarily the use of the credit rating agencies favorable stamp of approval that managed to catapult what should only have been a small local problem of badly awarded mortgages into a global mass confusion.

Posted by Per Kurowski | August 25, 2007 9:40 AM

Re Leo: “I'm not very sophisticated in this area, but I question whether your proposed solution would work. If the investors that used these institutions wanted a bank they would put their money in a bank.”

Well the problem was that the banks were really not allowed to be banks anymore since those bank regulators from Basel, worried only about stopping a bank crisis on their own watch, kept trying to keep bank risks out of banking and therefore forced those risks to go into hiding somewhere else.

Posted by Per Kurowski | August 25, 2007 9:55 AM

Re Don Williams “But there is an additional problem no one's pointed out yet. Because of bank runs during the Great Depression, We used to keep banking broken up at the STATE level. That is, we had LOTs of banks. So if things crashed and burned in any one industry or area of the country, the damage was pretty much limited. As with water compartment doors on a ship. That's been done away with. We NOW have MUCH larger, integrated banks that operate across much of the United States -- and hence could pull the whole country down with them.”

Absolutely! Since the larger banks get the more competitive they become while at the same time the larger they get the harder they could fall, on us, there seems to be no other solution to this dilemma than to start implementing a tax or let’s call it a special disaster insurance premium on the size of the banks.

Posted by Per Kurowski | August 25, 2007 9:56 AM