Category Archives: Banking industry

Banks Scapegoat Regulations for More Costly Loans Post Crisis

Banks and their allies have been using every opportunity possible to blame regulations for changes in their business models after the crisis, particular if they can make it sound like the broader public, as opposed to their bottom lines, is what is suffering. Normally this messaging effort stays at the background noise level, but sometimes the lobbyists succeed in getting their message treated as a story in its own right.

A recent example is a Financial Times story early this week…

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Peter Van Buren: Drone-Killing the Fifth Amendment

Yves here. This post on the Administration’s efforts to justify its official policy of murder by drone shows how due process is dead in America. That may seem a bit far afield of Naked Capitalism’s beat. But the systematic assault on the Constitution is another, even more troubling, manifestation of what we see operating in the financial sphere: that hard-won protections for ordinary citizens are being stripped away, so that those who have access to resources (whether via personal wealth or institutional authority) can operate unfettered, to increase their power and ability to plunder even more.

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The Argentina Debt Case

Almost everyone now knows that the world of international finance is not a particularly robust one, nor is it particularly just or fair. But it has just got even weirder and more fragile, if this can be imagined. A recent ruling of the U.S. Supreme Court, refusing to hear an appeal by the government of Argentine against a decision of a lower court on a case relating to its debt restructuring agreement with creditors over a decade ago, is not just a blow against the state and people of Argentina. It has the potential to undermine the entire system of cross-border debt that underlies global capitalism today.

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Bill Black: AG Holder – “The U.S. Announces the Indictment of Citigroup’s Senior Officers for Fraud”

Yves here. I’m serving an extra heaping of contempt on the latest giveaway bank settlement, this one with Citigroup for a headline figure of $7 billion which is really $4.5 billion in cash and the rest in various chits. We’re turning the mike over to Bill Black, who excoriates Attorney General Eric Holder.

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Six Years After the Global Financial Crisis, What Have We Learned?

Yves here. This post looks at how little has been done in the wake of the global financial crisis is instructive because it takes an international view. The Australian writer, Catherine Cashmore, is particularly anxious about the failure to address the usually lucky country’s ginormous property bubble, and its not alone in having this problem (cue the UK, China, and Canada). It the US, although we’ve had a housing “recovery” and some markets are looking frothy, the bigger issues are the squeeze on renters as former homeowners are now leasing and the stock of rentals is tight in some markets (in part due to destruction of homes that would have been rentable in the foreclosure process due to servicer mismanagement and in some markets, due to properties being held off the market, both by servicers and by landlords who are either in the process of rehabbing them or have otherwise not leased them up). And it focuses on the elephant in the room: lousy worker wage growth.

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TBTF Strike Back! SEC Commissioner Calls FSOC “Vast Left Wing Conspiracy”

One of the favored practices of the banking industry in recent years has been to engage in not merely shameless, but truly deranged hyperbole when anyone dares voice so much as an itty bitty threat against their prerogatives. For instance, venture capitalist Tom Perkins had a meltdown in the op-ed section of the Wall Street Journal, conflating criticism of rentier behavior among the 0.1% as an incipient Kristallnacht. Jamie Dimon in March 2009 (yes, you have the date right) had the temerity to complain about the “vilification” of Corporate America over the financial crisis. Even the weak restrictions on executive pay in the TARP produced outcries and desperate efforts to repay the TARP quickly (and the cronyistic Treasury acceded, rather than requiring banks get their capital levels higher first).

We witnessed a new outburst of Banking Industry Persecution Complex yesterday from SEC Commissioner Michael Piwowar, who was speaking before an assembly of fellow inmates at the American Enterprise Institute.

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Yellen Tells Whoppers to the New Yorker

A Nicholas Lemann profile of Janet Yellen in the New Yorker, based on interviews with her, is creating quite a stir, and for many of the wrong reasons. The article verges on fawning, but even after you scrape off the treacle, it’s not hard to see how aggressively and consistently the Fed chair hits her big talking point, that’s she’s on the side of the little guy. As correspondent Li put it:

She’s simultaneously Mother Teresa (spent her whole life caring about the poor without actually meeting any poor people) and Forrest Gump (present when all bad deregulatory polcies were made, but miraculously untainted by them).

Puh-lease! She’s Bernanke in a granny package, without the history lessons.

In fact, as we’ll discuss, Yellen’s record before and at the Fed shows she’s either aligned herself with banking/elite interests or played two-handed economist to sit out important policy fights. Even if she actually harbors concern for ordinary citizens, she’s never been willing to risk an ounce of career capital on it.

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Don Quijones: Why Are TBTF Banks So Happy With The European Banking Union?

On Tuesday, November 4th of this year, supervision of the Eurozone’s 130 biggest banks, representing 80% of total financial assets, will be passed from national authorities into the welcoming hands of the ECB. From that day on, European banking union will be a reality.

The banks love the idea, as do apparently most Eurocrats, Members of the European Parliament, and national leaders. As for the rest of the inhabitants of the Eurozone – all of whom will be impacted in one way or another – most are blissfully unaware that it is even happening.

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