What's the Difference Between a Bank and a Bank Holding Company?

The Harvard Law School Corporate Governance Blog yesterday featured a post by John Coates accusing the bailout of robbing banks.

"The Troubled Asset Relief Program," writes Coats, "has channeled aid to bank holding companies rather than banks. The Obama administration’s new Financial Stability Plan will have more influence on bank lending if it actually directs its support to banks."


Coats then explains the distinction between banks and bank holding companies: "Banks take deposits and make loans to consumers and corporations. Bank holding companies own or control these banks. The big holding companies also own other businesses, including ones that execute trades both on their clients’ behalf and for themselves," he writes.

"While TARP has been generous with bank holding companies, these companies have not been so generous with their banks," he adds. "Four large holding companies — JP Morgan, Citigroup, Bank of America and Wells Fargo — initially received a total of $90 billion in TARP money in the fall, but by the end of 2008 they had contributed less than $15 billion in equity capital to their subsidiary banks.

"The holding companies seem to have invested most of their TARP money in their other businesses or else retained the option to do so by keeping it in deposit accounts, even as the capital of their banks decreased. At the same time the banks, which provide the majority of loans to large corporate borrowers, drastically reduced lending to new borrowers."

Are the bailout cops over at Recovery.gov keeping an eye on this?

'Upstreamism': Your zip code affects your health as much as genetics

Upstreamism advocate Rishi Manchanda calls us to understand health not as a "personal responsibility" but a "common good."

Sponsored by Northwell Health
  • Upstreamism tasks health care professionals to combat unhealthy social and cultural influences that exist outside — or upstream — of medical facilities.
  • Patients from low-income neighborhoods are most at risk of negative health impacts.
  • Thankfully, health care professionals are not alone. Upstreamism is increasingly part of our cultural consciousness.
Keep reading Show less

Calling out Cersei Lannister: Elizabeth Warren reviews Game of Thrones

The real Game of Thrones might be who best leverages the hit HBO show to shape political narratives.

Photo credit: Mario Tama / Getty Images
Politics & Current Affairs
  • Sen. Elizabeth Warren argues that Game of Thrones is primarily about women in her review of the wildly popular HBO show.
  • Warren also touches on other parallels between the show and our modern world, such as inequality, political favoritism of the elite, and the dire impact of different leadership styles on the lives of the people.
  • Her review serves as another example of using Game of Thrones as a political analogy and a tool for framing political narratives.
Keep reading Show less

Following sex, some men have unexpected feelings – study

A new study shows that some men's reaction to sex is not what you'd expect, resulting in a condition previously observed in women.

Credit: Pixabay
Sex & Relationships
  • A new study shows men's feelings after sex can be complex.
  • Some men reportedly get sad and upset.
  • The condition affected 41% of men in the study
Keep reading Show less
Videos
  • Climate change is no longer a financial problem, just a political one.
  • Mitigating climate change by decarbonizing our economy would add trillions of dollars in new investments.
  • Public attitudes toward climate change have shifted steadily in favor of action. Now it's up to elected leaders.