The latest idea out of the G20, that of creating an international regulatory structure for the biggest international banks, sounds like progress but I doubt it will prove to be. Some regulators took note of the dangers posed by globe-spanning financial behemoths prior to the crisis. The Bank of England, in its April 2007 Financial […]
Read more...Keynes, himself a successful investor, was alert to the danger of a disproportionate level of speculative activity. His oft-repeated remark: Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country […]
Read more...The domestic politics of Ireland are still on a tightrope. Their coalition government, which had has been studiously ignoring three empty parliamentary seats, has now been told by the Supreme Court to get on with it and hold by-elections for one of them, which has been unoccupied for a scandalous 18 months. The by-election is […]
Read more...By Viral Acharya, Professor of Finance, Stern School of Business, New York University, Thomas F. Cooley Professor of Economics, Stern School of Business and Faculty of Arts and Science, New York University, Matthew Richardson, Professor of Applied Economics, Stern School of Business, New York University, Richard Sylla, Professor of Economics, Stern School of Business, New […]
Read more...By Richard Alford, a former economist at the New York Fed. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. Even prior to the financial crisis of 2007, economists and policymakers actively debated whether central banks should use interest […]
Read more...The Wall Street Journal has a report on Goldman’s new efforts to rebuild its damaged brand. The problem, of course, is that this is certain to be just that, a branding/marketing exercise, not an plan to make fundamental changes. And why should it be? Goldman, even with the heat it received and the fines it […]
Read more...By Wallace C. Turbeville, former CEO of VMAC LLC and a former Vice President of Goldman, Sachs & Co, now Visiting Scholar at the Roosevelt Institute. Cross-posted from New Deal 2.0 Why would such a large swaps market be a possible exemption from FinReg? The traded foreign exchange market is the big enchilada. It is […]
Read more...I should have expected this, Team Obama is so predictably bank friendly that it was inconceivable that the Administration would ever decide against them on anything other than the occasional sop to maintain plausible deniability. But this morning’s news stories reveal the officialdom isn’t even bothering to keep up appearances. First, from Politico writer Ben […]
Read more...I’m running this clip of Satyajit Das for several reasons. First, it gives a very good big picture view of the problems with the Eurozone rescue fund, and is germane given that those concerns are coming to the fore (witness our post earlier today). Second, more generally, it gives readers a chance to see him […]
Read more...By Wallace Turbeville, the former CEO of VMAC LLC and a former Vice President of Goldman Sachs who writes for New Deal 2.0 It is now obvious that when President Bush made his victory speech on the aircraft carrier in front of the now-famous “Mission Accomplished” banner, he was a bit premature in his assessments. […]
Read more...Today, quite a few commentators fell in with the take of the writeup by Real Time Economics on a speech by Paul Volcker given a conference on macroprudential regulation hosted by the Federal Reserve Bank of Chicago. Its lead-in: Former Federal Reserve Chairman Paul Volcker scrapped a prepared speech he had planned to deliver at […]
Read more...The normally sound Gillian Tett of the Financial Times endorses an idea that is both dangerous and unnecessary, namely, government backstopping of the system of short-term collateralized lending called repo, for “sale with agreement to repurchase.” The problem with her analysis is that her proposal treats symptoms rather than the underlying ailment. It would amount […]
Read more...The disastrous twins, ratings agency credit ratings and RWAs (risk weighted assets), are still embedded in Basel III. Dodd-Frank does not like this much. The ratings agencies are still a big part of Basel III, though the December draft does allow for the alternative possibility of using bank-internal models for assessing credit risk. Alas, the […]
Read more...Another ticking time bomb in the realm of real estate bad behavior is bound to go off sooner rather than later, and it is likely to impede normalization of values of residential property. As readers no doubt know, there is a lot of actual and shadow residential real estate inventory in the US. The time […]
Read more...I received this query from someone we will call AK via e-mail: Was wondering if you might be help with a mental exercise I’ve been toying with the last few weeks pertaining to the roll of timeframe of consequences, and whether we will be hit with a shock or slow-burn when gravity finally kicks in. […]
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