Pondering the Bank of America settlement and financial regulation.

[jon_leonard]

I'm trying to sort out how the various pieces fit together: Early in the crisis, there were a lot of regulatory actions that, taken as a whole amounted to "giving money to banks". For example, the Federal Reserve started paying interest on reserves, which is a bank-only bonus; similarly, loaning banks money so that they can buy treasury bonds is

Comments

[jon_leonard]

Well, describing it as a run on the banks is at the very least incomplete: The Fed's discount window solves the illiquid bank problem, but of course does nothing for insolvent banks (and many of them really were insolvent). That has various causes and triggering events, etc