Category Archives: Corporate governance

How Serious is NY Fed Dudley’s Tough Talk About Fixing Banking Culture?

Last week, New York Fed President William Dudley gave a speech on remedying cultural problems in financial services firms, meaning the tendency of employees to loot them and leave the mess in taxpayers’ laps. It caught pretty much everyone by surprise because it contained two sensible and effective reform ideas, namely, that of putting compensation measures in place that would have the effect of rolling them a long way back towards the partnership model, as well as making it harder for bad apples to find happy homes in other firms.

My sources are of the view that Dudley was browbeaten into taking a tougher line by the Federal Reserve Board of Governors, specifically Danny Tarullo, rather than being keen to be more aggressive himself. Nevertheless, the fact that Dudley is pushing some tough ideas is an important shift, even if the New York Fed president was under pressure to look serious.

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AIG Bailout Trial Bombshell II: Fed and Treasury Cornered AIG’s Board into Taking a Legally-Dubious Bailout

As we said in our companion post today on the AIG bailout trial, former AIG CEO Hank Greenberg may have a case after all. Mind you, we are not fans of Greenberg. But far too much of what happened during the crisis has been swept under the rug, in the interest of preserving the officialdom-flattering story that the way the bailouts were handled was necessary, or at least reasonable, and any errors were good faith mistakes, resulting from the enormity of the deluge.

Needless to say, the picture that emerges from the Greenberg camp, as presented in the “Corrected Plaintiff’s Proposed Findings of Fact,” filed in Federal Court on August 22, is radically different. I strongly urge readers, particularly those with transaction experience, to read the document, attached at the end, in full. It makes a surprisingly credible and detailed case that AIG’s board was muscled into a rescue that was punitive, when that was neither necessary nor warranted. And the tactics used to corner the board were remarkably heavy-handed.

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Finance Sector Wages: Explaining Their High Level and Growth

Individuals who work in the finance sector enjoy a significant wage advantage. This column considers three explanations: rent sharing, skill intensity, and task-biased technological change. The UK evidence suggests that rent sharing is the key. The rising premium could then be due to changes in regulation and the increasing complexity of financial products creating more asymmetric information.

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Who Wins in the Financial Casino?

I received a message last week from a savvy reader, a former McKinsey partner who has also done among other things significant pro-bono work with housing not-for-profits (as in he has more interest and experience in social justice issues than most people with his background). His query:

We both know that financialization has, among so many other things, turned large swaths of the capital markets into a casino

Here’s my thought/question: is there a house?

The common wisdom is that the ‘house wins’ in casinos.

So, who or what was really the ‘house’?

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US Corporate Executives to Workers: Drop Dead

The Washington Post has a story that blandly supports the continued strip mining of the American economy. Of course, in Versailles that the nation’s capitol has become, this lobbyist-and-big-ticket-political-donor supporting point of view no doubt seems entirely logical. The guts of the article: Three years ago, Harvard Business School asked thousands of its graduates, many […]

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Summer Rerun: Lazy Corporate Monopolies Are Why America Can’t Have Nice Things

This post first ran on January 7, 2013 By Matt Stoller, who writes for Salon and has contributed to Politico, Alternet, Salon, The Nation and Reuters. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller Throughout much of the United States, cell phone service is terrible (so is broadband, […]

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Greenspace, Gardeners, Parents, Property, and Common Pool Resources

“With community property, you all have equal say, but with kids, the parents get the last word, so who’s rightest, safest, greenest, volunteeriest, or best validated by property values is trumped by the parents’ prerogative. If they want their kids to play on the island, there’s not much you can do about it but complain your way to a rift.” Hmm…….

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Young Owners of Low-Budget GM Cars Weren’t Worth Saving

Writer libbyliberal describes how the Obama Administration’s National Highway Traffic Safety Administration worked with GM for years to cover up the automaker’s ignition system defect that would lead to sudden power system failure. That fault is estimated to have caused at least 13 deaths and over 30 crashes. It’s also a textbook case of crapification.

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Delaware Chief Justice to Shareholders: Drop Dead

We’ve argued that the notion that companies are obligated to maximize shareholder value is a theory made up by economists and eagerly adopted by corporate executives, with little to no foundation in law. We received confirmation of our thesis in the form of a Columbia Law Review article by the chief justice in Delaware, Leo Strine, arguing that shareholder activism needs to be curbed. As if CEOs are really breaking a sweat over those pesky shareholders.

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These Charts Show What is Wrong With American Capitalism

For the last 30 years, neoliberals have fixated on a simple program: “Get government out of the way,” which meant reduce taxes and regulations. Business will invest more, which will produce a higher growth rate and greater prosperity for all. The belief was that unfettered capitalism could solve all ills.

That’s not how this children’s story is turning out.

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Murdoch’s Other Hacking Scandal: A Review of “Murdoch’s Pirates” by Neil Chenoweth

Back in the late 1980’s, Rupert Murdoch’s latest fiendish plan for world media domination (there’s a new one every decade or so) centred on pay TV. But as the 1990s rolled in, the media baron focused on a new world to conquer: crypto.

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