Wed, 07/01/2009 - 8:32am — lambert
Fed Chairman Ben Bernanke has argued that he, along with others, had behaved in the manner of an emergency crew that needs to save a burning home before it destroys an entire neighborhood -- without first asking whether the fire was started carelessly.
[Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City] asked in response: "If the fire was started by a homeowner who ignored fire codes and smokes in bed, should the neighbors be required to rebuild the home at twice its original size at their expense?
Simple answers to simple questions:
Yes.
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Regional Split and Tension Within the Fed
The interesting part of this story is how the Kansas Fed Chief, who probably oversees a lot of smaller, healthier banks now being hit with higher FDIC fees to clean up the larger competitors in New York, differs so markedly from the Village
/Wall Street view. It's inevitable, IMO. There are a bunch of banks who did things right getting screwed to help support their bigger competitors. I'd be pissed, too.
"Do what you feel in your heart to be right -- for you'll be criticized anyway. You'll be damned if you do, and damned if you don't. " - Eleanor Roosevelt