Banks Promise Not to Fail Again
DERIVATIVE NURSERY – After many months of intense behind-the-scenes negotiations with Congress, those prominent banks which were being designated “too big to fail,” and hence received federal bailout funds, have promised not to fail again. The promise, a completely nonbinding and optional agreement, has gained large support among politicians on both sides of the aisle.
“This is exactly the kind of reform we were hoping for,” said Senate Banking Committee Chairman Christopher Dodd (D-Conn.). “I really think this nonbinding, completely optional agreement not to fail is just what the investment banking sector needs. A banker’s word,” he added with a wink, “is gold.”
Banking institutions, such as Bank of America, JP Morgan Chase, and Citibank, have also commented on the new regulation, calling the legally impotent agreement “a fantastic compromise” that should in no way “affect next quarter profits.” When asked about the current lack of credit available to consumers and small businesses, the banks’ spokesmen looked bemused while mumbling that they would “get around to it, eventually.”
Sen. Richard C. Shelby (R-Ala.), the committee’s ranking Republican, stated that, although he was “uneasy” about implementing such stringent regulation, it “had to be done” in light of the recent recession. He went on to vehemently criticize the current administration’s oversight of bank CEO bonuses.
“These are good people, and President Obama is denying them their livelihoods. It goes against the very principals of the American Dream,” said Sen. Shelby.
Despite such a groundbreaking success, the promise does have its critics. In particular, skeptics want to know if the agreement was or pinky promise or a spit-handshake. The secretive manner in which the promise was made has even led some to wonder whether some of the banks had their fingers crossed.
The American public, shocked into silence at the news of bankers receiving their just desserts, could not be reached for comment.