Category Archives: Regulations and regulators

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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Germany Bucking Toxic, Nation-State Eroding Transatlantic Trade and Investment Partnership

We’ve inveighed against the dangers of two Orwellianlly-branded “trade” deals, the TransPacific Partnership and its ugly twin, the Transatlantic Trade and Investment Partnership. Both negotiations have been shrouded in a deeply troubling level of secrecy, with their draft terms being given classified status and Congressmen kept largely in the dark as to their content (summaries provided by the US Trade Representative aren’t remotely adequate, since as in all contracts, much hinges on exact language).

The business press in the US has tended to amplify Administration messaging, that both deals are moving forward. In fact, as we’ve covered in some detail, the TransPacific Partnership is in quite a lot of trouble, and as we’ll discuss below, the Transatlantic Trade and Investment Partnership is also going pear shaped.

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FCC Deluged by Net Neutrality Comments Against Web-Killing “Fast Lane” Proposal

Numerous media outlets reported today that the FCC was inundated by last-minute comments on proposed net neutrality rules, and was forced by its server crashing as a result of the volume to extend its deadline to Friday. The agency has received 780,000 comments so far, more than it has ever received on a rule-making, and activists contend the real figure is higher

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Do Trans Fat Bans Save Lives?

Artificial trans fat is omnipresent in the global food chain, but the medical consensus is that it increases the risk of developing cardiovascular diseases such as heart disease and stroke. Between 2007 and 2011, New York City and six other county health departments implemented bans on trans fat in restaurants. This column presents the first evaluation of the effect of these bans on cardiovascular disease mortality rates.

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Financial Times on Private Equity Firm Grifting and Arrogance

The Financial Times weighed in today with a long, well-researched piece, Private equity: A fee too far, on an issue we’ve discussed for some time, that of private equity firm oh-too-cleverness and too often, outright pilfering, in its dealings with investors, who include public pension funds, foundations, endowments, and insurers. This article is far more […]

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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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How Mandatory Arbitration Cheats Consumers

A few weeks ago, the topic of arbitration clauses became a contretemps when General Mills tried the remarkably cheeky stunt of trying to assert that consumers who had downloaded coupons or simply liked the company on Facebook had given up their right to sue if they were harmed by using its products and could seek remedy only through “informal negotiation via email” or arbitration. The firestorm of criticism forced the food giant to back down.

But consumers and other customers, like small businesses, are increasingly being denied access to courts though the use of mandated “pre-dispute” arbitration clauses and these are often paired with class action waivers.

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France Has Hissy Fit Over BNP Paribas Fine and Dollar Dominance

France appears to have taken its public relations strategy for dealing with $8.9 billion fine against BNP Paribas from an old saying among lawyers: “If you have the facts on your side, pound the facts. If you have the law on your side, pound the law. If you have neither on your side, pound the table.” Here’s the guts of the French compliant, which is that the US is abusing the power of dollar dominance:

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Bill Black on Real News: BNP Paribas Fine Shows Financial Crime Still Pays

This Real News Network interview with Bill Black provides a good high-level overview of what is right and (mainly) wrong with the $8.9 billion settlement with BNP Paribas over money-laundering charges. Black stresses that financial crime remains a very attractive activity for both the enterprise and its employees. As usual, no executives were charged or even fined, although thanks to the intervention of New York financial services superintendent Benjamin Lawsky, eleven employees of the French bank lost their jobs.

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Reform and Be Re-Elected

Yves here. I suspect many will take issue with the cheery view expressed in this article. The authors contend that reformist candidates in the post-crisis era do better at polls than status quo types. That makes sense, but the authors appear to define “reform” in terms in more modest terms than most readers would deem to be sufficient. But this finding sounds correct, intuitively. Look at Elizabeth Warren. Even though she has made great use of her Senate bully pulpit, and has kept a focus on bank re-regulation, her policy proposals, such as her student loan fixes, have been cautious. A frame-breaking reformer, such as a Huey Long, would require a far more divided electorate with geographic concentrations of radicalized voters to be viable.

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