Bernanke Takes Big Banks to Task in Front of Smaller Bankers

Federal Reserve chairman Ben Benanke said in a speech in Orlando over the weekend to Independent Community Bankers of America that big banks feeding at the public trough is something that needs to end as the economy recovers.

March 22, 2010
By Dees Stribling, Contributing Editor

Courtesy Flickr Creative Commons user alancleaver_2000

Federal Reserve chairman Ben Bernanke said in a speech in Orlando over the weekend to Independent Community Bankers of America that big banks feeding at the public trough is something that needs to end as the economy recovers. “Unconscionable” was the chairman’s choice of adjectives to describe ongoing bank bailouts, and it probably went over pretty well with the community bankers in the audience.

“It is unconscionable that the fate of the world economy should be so closely tied to the fortunes of a relatively small number of giant financial firms,” Bernanke said. “If we achieve nothing else in the wake of the crisis, we must ensure that we never again face such a situation.”

Benanke also spoke well of so-called corporate “living wills,” which would “help firms and regulators identify ways to simplify and untangle the firm before a crisis occurs.” That is, a plan to dismantle themselves in case of bankruptcy (a self-destruct button?). The concept isn’t novel; regulators in the UK are currently working on putting together such a requirement for that country’s banks, and the G-20 wants them for all big banks in the developed world too.

Wal-Mart and the Dragon

Retail behemoth Wal-Mart Stores Inc. has struck a deal for exclusive rights to sell 100 or so toys, gewgaws and other gimcracks associated with for DreamWorks Animation SKG Inc.’s upcoming theatrical release, How to Train Your Dragon. The deal is being called a first of its kind in that the studio and the retailer have been collaborating actively on designing the toys and other merchandise, packing and so forth for more than a year now. Typically, Wal-Mart strikes merchandising deals without working so closely with a studio.

The only other retailer with anything to do with merchandising the movie will be McDonald’s, in a Happy Meal sort of limited way. Wal-Mart, on the other hand, will create two commercials to promote the movie, and place about 2,500 20-foot Viking ships in its stores to promote it; they will be half the size of the 40-foot ship that was brought to Times Square on Monday. Presumably Vikings have something to do with dragons in the movie.

According to Wal-Mart, other such deals will happen in the future as the company tries to nudge the sale of non-food, non-necessities upward. No word on the company’s contingency plans for warehouses full of toys and other merchandise if How to Train Your Dragon happens to be a bomb.

REIT IPO Expanded by 10M Shares

Are the financial markets seeing a return of the real estate IPO? Or maybe it’s just REITs, who have been building their war chests with some gusto lately.

HRPT Properties Trust has priced a public offering of 30 million common shares at $7.25 per share to raise gross proceeds of $217.5 million. Initially, the company had sized the offering at 20 million shares. The offering is expected to close on Wednesday, with the REIT planning to pay down some debt as well as acquire new properties with the dough.

Wall Street ended the day down on Friday, with the Dow Jones Industrial Average dropping 37.19 points, or 0.35 percent. The S&P 500 lost 0.51 percent and the Nasdaq declined 0.71 percent.