Category Archives: Moral hazard

David Dayen: Out of Control – New Report Exposes JPMorgan Chase as Mostly a Criminal Enterprise

There’s been an unlikely yet welcome resurgence of chatter about breaking up the nation’s largest and most powerful banks. Bloomberg’s story quantifying the too big to fail subsidy grabbed some eyeballs (and there’s an upcoming GAO report on the subsidy that will do the same). Sherrod Brown announced an unlikely pairing with David Vitter working on legislation on the subject. Dallas Fed President Richard Fisher is going to give a big speech on Friday on breaking up the banks… at CPAC, the largest conservative political conference of the year.

Bill Black: Which Aspect of the FDIC’s Litigation Failures is the Most Embarrassing and Damaging?

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Jointly posted with New Economic Perspectives

Dave here (always wanted to say that!): I know Yves wrote about this yesterday, but it’s always worth getting Bill Black’s reaction on these regulatory matters – not to mention to further illustrate and amplify the FDIC’s conduct.

On March 11, 2013 the Los Angeles Times published a revealing article by E. Scott Reckard entitled: “In major policy shift, scores of FDIC settlements go unannounced.”

The article’s summary statement captures the theme nicely. “Since the mortgage meltdown, the FDIC has opted to settle cases while helping banks avoid bad press, rather than trumpeting punitive actions as a deterrent to others.”

FDIC Hides “Scores” of Bank Settlements Since 2007

The FDIC has been doing banks a big favor by agreeing not to publish the fact that they’d engaged in sufficiently wayward behavior for the agency to threaten regulatory action and negotiate a settlement. The Los Angeles Times unearthed this practice via a Freedom of Information Act request:

Did Intrade Do an MF Global?

By Rajiv Sethi, Professor of Economics, Barnard College, Columbia University. Cross posted from his blog

Dave Dayen: Servicers Committed Loan Error Rates of Either 4.2% or 97.2%, Take Your Pick

By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen

Anyone paying a smattering of attention justifiably raised a skeptical eyebrow at the Office of the Comptroller of the Currency’s assurances to Congress that the Independent Foreclosure Reviews revealed hardly any borrower harm from servicer malfeasance. One has to marvel at this wondrous finding, particularly since just about no one who has gotten close to the records who was not paid for by banks has come up harm estimates remotely this low. Which raises another question: did the OCC lie (or more charitably, artfully fudge numbers) to Congress?

Ian Fraser: Stephen Hester, the Great Escape Artist

By Ian Fraser, a financial journalist who blogs at his web site and at qfinance. His Twitter is @ian_fraser. [An edited version of this article was published on pages 34-35 of the Sunday Herald on February 10th, 2013].

It has been described as the biggest banking felony in history … yet no-one has been prosecuted for the Libor fixing scandal. Ian Fraser looks at the RBS sacrificial lambs.

During Royal Bank of Scotland’s IT meltdown last summer, chief executive Stephen Hester referred to the risk “that you turn over rocks and find new things [that you have to clean up].” Last Wednesday, nearly five years on from the £45.5 billion taxpayer funded rescue of the Edinburgh based lender, a vast rock was hoisted aloft by three regulators. What lurked underneath was not a pleasant sight.

Bill Black: Yglesias Mimics “Mankiw Morality” and Bashes Bastiat

Yves here. Remind me never to get on Bill Black’s bad side.

Bill Black: Yglesias Pours the Geithner, Holder, Breuer (GHB) Banksters Immunity Doctrine in our Drinks

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City.

It’s early, but Salon has published on January 30, 2013 either the funniest or saddest column of the year to date: “Are Banks Too Big To Prosecute?”

The Garrulous Insolence of Simon Thompson and Anthony Browne

A pair of idiots testing the patience of the Parliamentary Commission on Banking Standards

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Category Archives: Moral hazard

David Dayen: Out of Control – New Report Exposes JPMorgan Chase as Mostly a Criminal Enterprise

Bill Black: Which Aspect of the FDIC’s Litigation Failures is the Most Embarrassing and Damaging?

FDIC Hides “Scores” of Bank Settlements Since 2007

Did Intrade Do an MF Global?

Dave Dayen: Servicers Committed Loan Error Rates of Either 4.2% or 97.2%, Take Your Pick

Ian Fraser: Stephen Hester, the Great Escape Artist

Bank of America Foreclosure Reviews: How Promontory Became a Shadow Regulator (Part VA)

Neil Barofsky Tells Jon Stewart How the Ego and Narcissism of Washington Preserve a Broken Status Quo

Neil Barofsky: Geithner Doctrine Lives on in Libor Scandal

Bill Black: Yglesias Pours the Geithner, Holder, Breuer (GHB) Banksters Immunity Doctrine in our Drinks

The Garrulous Insolence of Simon Thompson and Anthony Browne

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