Sabri Oncu wrote: me: >> There's no ideological content in calling -- or not calling -- GMAC a >> "bank."
> There is! If you call it a bank, then you will regulate it accordingly! It's not what you or I call GMAC that counts. It's what the legal system and regulators call it. Banks and finance companies are creatures of government rules and regulations. A bank (a depository institution) is defined by its legal charter. Because of their special charters, banks have the right to take deposits, which are much more short-term than any bills. (There's no way to stagger inflows and outflows of deposits the way you can with incomes short-term paper.) Because of their special charter, banks' deposits are insured (up to a point, of course). Because of that insurance, banks have to jump through the FDIC's and other regulators' hoops. On the other hand, a finance company or a "non-bank bank" like GMAC does not receive deposits and thus has no deposit insurance. -- Jim Devine / "Nobody told me there'd be days like these / Strange days indeed -- most peculiar, mama." -- JL. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
