Category Archives: Banking industry

Ilargi: A Stampede of Elephants in the China Shop

On the danger that China’s overgrown shadow banking system poses to the economy, and the practical and political obstacles to curbing it.

Yanis Varoufakis: Europe’s Slide into Deflation, and What to do About It

By Yanis Varoufakis, a professor of economics at the University of Athens. Cross posted from his website. From an interview for Jornal de Negócios by Jorge N. Rodrigues Europe is in the clasp of the deflationary forces that resulted directly from its inane handling of the Eurozone crisis. In this interview, I discuss deflation and […]

Bill Black: Since When Does Refusing to Put Fraudulent Banks into Receivership Help the Economy?

Conservative economists love “creative destruction.” They can’t wait to “get their Schumpeter on” when a business fails and thousands of workers lose their jobs.

There is no more “creative destruction” conceivable than when we put a bank that has become a fraudulent enterprise into receivership, remove the controlling officers leading the fraud, and sell the bank through an FDIC-assisted acquisition

GSE Reform Dead for Now

I’m a little surprised at the overly coded reporting at the New York Times and particularly the Wall Street Journal, where Nick Timiraos provides top-notch coverage on the mortgage beat, on the implications of the failure of a widely-touted, Administration-backed GSE reform bill to get out of the Senate Banking Committee. Basically, it confirms what I’ve long believed but refrained from writing about, namely, that government sponsored enterprise, aka, GSE reform, was not going to get done in this session of Congress.

Bill Black: GAO and Wall Street Journal Whitewash Huge Criminal Bank Frauds

Every day brings multiple new scandals. At least they used to be scandals. Now they’re simply news items strained of ethical content by business journalists who see no evil, hear no evil, and speak not about evil.

“Independent” Foreclosure Review Error Rate Vastly Higher Than Previously Admitted

At this point, it seems hard to add insult to injury, given the terrible track record of the OCC Independent Foreclosure Reviews. But it’s nevertheless been done.

Volcker Rule: Swiss-Cheesed or Beefed Up?

Gerald Epstein provides an informative, layperson-accessible update on what has become of the much-ballyhooed Volcker Rule.

Quelle Surprise! Ginnie Mae Says Bank of America Has Lots of Servicing Documents Missing; MERS Also in Hot Water

An article by Kate Berry in American Banker earlier this week hasn’t gotten the attention it deserves. Anyone who was paying attention to the mortgage beat in 2010 through 2012 knew that mortgage securitization originators and servicers were playing fast and loose with critical documents like mortgage notes because they couldn’t be bothered to observe […]

Mirable Dictu! US Regulators Impose Tougher Rules on Bank Capital

It’s easy to be cynical about the state of bank regulations, since the regulators themselves have for the most part been badly captured by the industry. So it’s important to give them credit when they take a meaningful step in the right direction.

Robert Cowley, 2nd Baron Ardwhallan: A Scammer’s Comeuppance

Robert Cowley, CEO of fake bank Investment Suisse, goes to jail for fraud

IMF Imposing Even Tougher Austerity Conditions on New Loans

How the IMF has been devising even nastier versions of its austerity hairshirt in recent years.

Michael Lewis’ Repeat Omission: No Crimes Were Committed

In Flash Boys, Michael Lewis has again launched a book that hews to his established formula: colorful outsiders take on a big bad entrenched establishment and win. Even though Lewis seems assured of having yet another best-seller, this book is getting more criticism than his works usually do. Put it this way: when commentators as diverse as Felix Salmon, Matt Levine, and Pam Martens feel compelled to object, it looks like Lewis has overfitted this tale to his blockbuster formula.

David Dayen: How Chase Bank Denying Services to a Condom Shop Is Really About Deregulating Payday Lending

Under the odd conventions of journalism, if someone else writes about a topic, especially if it resembles a “scoop,” nobody else can write about it. So if you go down the road for a week or so chasing a story and then you see it in your friendly neighborhood copy of The Huffington Post, you can basically stop chasing. Thanks for taking food out of my mouth, HuffPo!

But in this case, the complicated story in question warrants more attention, because it’s a really good lesson in how “lobbying” incorporates more than just paying rich people in suits to sweet-talk politicians and regulators. This is the darker side of lobbying, with the venerated “small business owners” everyone loves to deify caught in the crossfire.

Chris Whalen Goes Off the Deep End, Issues Error-Filled Screed in Defense of Mortgage Servicers

I once had a good opinion of bank analyst Chris Whalen, despite having some reservations about him. But his error-filled screed against mortgage servicing regulations means he can no longer be taken seriously on the subject of banking. Whalen has become a textbook illustration of the Upton Sinclair saying, “It is difficult to get a man to understand something when his salary depends on his not understanding it.”