Federal judge asks: Why haven’t any top executives been prosecuted for financial crisis?

[TexasTowelie]

72. I disagree with your position regarding the firewall on deposits and increasing capital requirements

because those actions will tighten the market for loans which provide businesses the liquidity to maintain operations.

In addition to tightening the loan market, the banks would also be able to justify charging higher interest rates since there will be more people chasing after a limited amount of money available for borrowing. The interest rates charged by banks would rival those of the payday loan industry.

The fact that the capital requirements were low in previous decades meant that there was capital available for borrowing by both private and public interests that spurred economic development. While I am in favor of a sound financial sector, trying to implement a 1-1 reserve (the current total capital requirement is 10.5%) within a short time frame would result in less financial liquidity and most likely an economic calamity.

Think about bank runs, FDIC takeover of banks, the exposure to taxpayers and it is easy to realize that it isn't very likely that we'll ever go the route of requiring more capital than those adopted in July 2013 to satisfy the Basel III requirements. If we did, then we might as well eliminate fiat currency and return to the gold standard.