U.S. Senator Elizabeth Warren shot back at criticism from JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, saying bankers don’t dislike her because she knows too little but because she knows too much.
“The problem for these guys is that I fully understand the system and I understand how they make their money, and that’s what they don’t like about me,” Warren told the Huffington Post in a podcast interview released Friday.
The Massachusetts Democrat, who has gained prominence as one of Wall Street’s fiercest critics, responded to Dimon’s assertion in a speech this week.
“I don’t know if she fully understands the global banking system,” said Dimon, who offered to meet with Warren anytime she wants.
Asked twice in the Huffington Post interview whether she thought Dimon was “mansplaining” banking to her, Warren shook off the question.
“We’ll have to call in a mansplaining expert,” she said.
In the interview, Warren decried complaints from lenders that they’re stuck with complex regulations when they’re the ones responsible for inventing complex financial instruments.
“If you want to get out there and take on risks, OK, go out and do it, but don’t do it within the structure of a bank that gets backed up by the federal government,” she said.
SLL hopes that Senator Warren understands the full implication of that last statement. Never mind derivatives and other complex financial instruments. Fractional reserve banking, the bread and butter of every US bank, is inherently risky. At any given time, a bank has promised its depositors that they can withdraw their deposits on demand. Because banks lend out deposits and keep only a fraction in reserve, that’s a promise no bank can keep, simultaneously, to all its depositors. It is, in part, to address that inherent risk and the risk of runs that legislation establishing the Federal Reserve and deposit insurance was enacted, and why the doctrine of Too Big To Fail evolved. SLL agrees wholeheartedly with Senator Warren’s statement, but that will require, as long as banks practice inherently risky fractional reserve banking, that they not be backed by the Federal Reserve, deposit insurance, or Too Big To Fail.
Reblogged this on Starvin Larry.
Even with all the caveats and conditions, Zimbabwee still likes our banks and the dollar. We must have a better fractional reserve system.
http://www.theguardian.com/world/2015/jun/12/zimbabwe-offers-new-exchange-rate-1-for-35000000000000000-old-dollars