So, it will be 100 years on Dec. 23 since the Federal Reserve was born. The purpose in 1913 was to form a regulatory body to help stem the tide of bank failures in the United States of America. How has it done?
A major conference on the future of banking yesterday heard contributions on a European banking union which is being negotiated by Eurozone finance ministers. One of the aspects of that union will be a 'bail-in' of deposits when banks fail in the future. Michael Noonan, Ireland’s Minister for Finance confirmed yesterday that bail-ins or deposit confiscation will be used.
It has been obvious for some time that banks in many jurisdictions are insolvent and that they are simply too big for governments to rescue. It should come as no surprise that central bankers have been considering how to deal with this problem and that they have resolved a solution.
Observers of fractional reserve banking have noticed that your deposit into a bank can cause the bank to offer new loans well above and beyond the size of your deposit. Those watchers often object on the grounds that this is new money.
Stick with names that have resources in the ground they are growing. They should react best and see less tax loss selling. Earlier stage companies will find loss selling harder to avoid unless they are delivering good news and promising more to come.