This isn’t the first time in recent months we have heard serious warnings of a new and potentially quite dangerous credit bubble. Recall back in September, when Blackstone’s head of private equity proclaimed that “we are in the middle of an epic credit bubble.” Well they should know, because according to the article below from Reuters, Blackstone and many other private equity firms are the “alternative asset managers” directly responsible for its creation.
I don’t know about you, but I just can’t wait for another bankster bailout!
(Reuters) – A U.S. bank regulator is warning about the dangers of banks and alternative asset managers working together to do risky deals and get around rules amid concerns about a possible bubble in junk-rated loans to companies.
The Office of the Comptroller of the Currency has already told banks to avoid some of the riskiest junk loans to companies, but is alarmed that banks may still do such deals by sharing some of the risk with asset managers.
These clowns never learn, and why should they when society just bails them out from their stupidity.
“We do not see any benefit to banks working with alternative asset managers or shadow banks to skirt the regulation and continue to have weak deals flooding markets,” said Martin Pfinsgraff, senior deputy comptroller for large bank supervision at the OCC, in a statement in response to questions from Reuters.
Among the investors in alternative asset managers are pension funds that have funding issues of their own, he said.
“Transferring future losses from banks to pension funds does not aid long-term financial stability for the U.S. economy,” he added.
No, but it’s a great way to transfer risk to the muppets.
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