Gensler: MF Global Highlights Capital Shortfall Risks
Gary Gensler said that in the case of MF "the events are just but another reminder of the importance of having strong regulations to have enough capital in place early and to be ever alert for when short-term funding is starting to dry up."
At the Securities Industry and Financial Markets Association annual conference in New York on Monday, TheStreet asked Gensler whether MF Global's failure to sell itself at the last second to Interactive Brokers (IBKR) signals that stressed financial institutions can't find buyers, even if they aren't too big to fail -- to which he added, "when there starts to be a run on the bank, it's enormously challenging to find capital."
In MF Global's failure, it seems that both the requisite regulatory framework and capital were not in place to foster a sale that would avert a messy and loss-creating bankruptcy. While the firm was not
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