Money and Finance
As of this past January, any bank operating in the United States with more than $50 billion in assets must have the business equivalent of a living will—plans for what to do in the event of catastrophe. Every well-managed business should have contingencies and ways to assess its health and viability. But the fact that the Dodd-Frank financial regulations require the largest banks to submit detailed plans for worst-case scenarios suggests something is seriously amiss.
- What’s Inside America’s Banks? - By Frank Partnoy And Jesse Eisinger
Thanks to Peter for passing this along. Some four years after the 2008 financial crisis, public trust in banks is as low as ever. Sophisticated investors describe big banks as “black boxes” that may still be concealing enormous risks—the sort that...
- Sheila Bair: 5 Steps Obama Or Romney Must Take To Fix Wall Street
Found via The Big Picture. The former head of the FDIC warns that the financial system remains far from stable – and that regulations like the Volcker Rule may be too complex to be effective. These five steps, she suggests, could lead to more sensible...
- Albert Edwards: Spain's Bailout Solves Nothing
Going through Japan's lost decade with Peter Tasker was a prequel to our current plight. One of the key differences he had with consensus was on the banks. Consensus believed Japanese banks were at the apex of Japan's economic woes and the main...
- Secret Fed Loans Gave Banks Undisclosed $13b
The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing. The Fed didn’t tell anyone which banks were in trouble so deep...
- Nyt: End Bonuses For Bankers - By Nassim Nicholas Taleb
I HAVE a solution for the problem of bankers who take risks that threaten the general public: Eliminate bonuses. More than three years since the global financial crisis started, financial institutions are still blowing themselves up. The latest, MF Global,...
Money and Finance
Warren Stephens: How Big Banks Threaten Our Economy
As of this past January, any bank operating in the United States with more than $50 billion in assets must have the business equivalent of a living will—plans for what to do in the event of catastrophe. Every well-managed business should have contingencies and ways to assess its health and viability. But the fact that the Dodd-Frank financial regulations require the largest banks to submit detailed plans for worst-case scenarios suggests something is seriously amiss.
We all know what happened when the "too big to fail" banks teetered on the verge of collapse in 2008. The government stepped in with $700 billion of taxpayer money, justified by the notion that failed banks would destroy our economy. (Of the eight biggest U.S. banks, only J.P. Morgan Chase didn't receive a bailout.) Three years later, we have Dodd-Frank's complex regulations and banks that are bigger than ever.
The solution isn't to demand that the big banks plan for disaster—it's to take steps to prevent disaster. We need bank reform that addresses the root of the problem: Some banks are simply too big—for their own good, as well as that of investors, the economy and their customers.
- What’s Inside America’s Banks? - By Frank Partnoy And Jesse Eisinger
Thanks to Peter for passing this along. Some four years after the 2008 financial crisis, public trust in banks is as low as ever. Sophisticated investors describe big banks as “black boxes” that may still be concealing enormous risks—the sort that...
- Sheila Bair: 5 Steps Obama Or Romney Must Take To Fix Wall Street
Found via The Big Picture. The former head of the FDIC warns that the financial system remains far from stable – and that regulations like the Volcker Rule may be too complex to be effective. These five steps, she suggests, could lead to more sensible...
- Albert Edwards: Spain's Bailout Solves Nothing
Going through Japan's lost decade with Peter Tasker was a prequel to our current plight. One of the key differences he had with consensus was on the banks. Consensus believed Japanese banks were at the apex of Japan's economic woes and the main...
- Secret Fed Loans Gave Banks Undisclosed $13b
The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing. The Fed didn’t tell anyone which banks were in trouble so deep...
- Nyt: End Bonuses For Bankers - By Nassim Nicholas Taleb
I HAVE a solution for the problem of bankers who take risks that threaten the general public: Eliminate bonuses. More than three years since the global financial crisis started, financial institutions are still blowing themselves up. The latest, MF Global,...