US Federal Reserve proposals to increase bank assets to potentially stave off the next financial crisis are taking the wrong approach, argues Dick Bove, Rafferty Capital Markets bank analyst. Increased bank assets will prevent financial crises and bank failures “The United States banking system is being made to adhere to an unproven theory that is totally incorrect,” Bove wrote in a research note yesterday. “This theory argues that if banks have more capital it will prevent financial crises and bank failures.” Bove points to bank panics and failures in 1819, 1837, 1857, 1873, 1893, 1907, and 1933 – in each of…
Bove Says Increased Bank Assets Requirement Increases Risk
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.