Category Archives: Banking industry

Steve Keen: Godzilla Banks are Good for You?

Yves here. Although Keen’s use of the Godzilla metaphor is fun, the unvarnished facts he presents are plenty alarming. Bank of England Governor Mark Carney is actually gleeful at the prospect that England’s banking sector might grow to be as large relative to its economy as Iceland’s and Cyprus’ on the eve of their busts. But even worse, Carney’s enthusiasm for a banking sector that continues with its cancerous (or as Keen would have it, monstrous) growth gives license to bank lobbyists in the US and Europe to press for high rates of growth in their finance sectors so as to defend their national champions.

Yes, Virginia, Banking Contributes a Lot Less Value Than You are Led to Believe

One thing we’ve discussed repeatedly is that the activities of large banks, as presently constituted, are purely extractive. And to add insult to injury, GDP calculations exaggerate what in the way of value they arguably do add.

Vermont Citizens Push to Form a State Bank, But Will Ratings Agencies Kill the Idea?

Martha R wrote to tell me that a serious effort is underway in Vermont to launch a state bank.

Quelle Surprise! Banks Are Opposed to More Liquid Markets When They Don’t Make Enough From Them

Bloomberg has an intriguing story about a bit of lobbying the big dealer banks are engaged in via a group called the Treasury Borrowing Advisory Committee, which represents 15 out of the total of 22 primary dealers (a primary dealer, among other things, gets to bid for its own account at Treasury bond auctions). Of course, the object of their efforts is to improve their profitability, here by putting parties they regard as competitors at more of a disadvantage.

Pimco, Blackrock Mulling Suing Ocwen Over Abusive Servicing

Funny what a difference a few days makes.

Better Markets Sues Department of Justice and Eric Holder Over JP Morgan Settlement

The public interest group Better Markets today filed suit against the Department of Justice and Eric Holder, alleging that the so-called $13 billion settlement that the Federal government entered into with the nation’s biggest bank was improper due to its secrecy and lack of third-party review.

Whatever You Do, Don’t Pay Attention to the Rising Eurozone Stresses

One of the noteworthy elements of Davos, at least according to media accounts, was the cheery, self-congratulatory tone among the Davos Men, at least until the final day, when the emerging markets rout began. But one of the front they thought they’d gotten under control, Europe, may be about to enter a new phase of political stress.

Twitter 2, JP Morgan, 0: Bythe Masters Withdraws After One Day Appointment as CFTC Advisor

This was not a world-record revolving door stint, but the head-spinning was of the good sort for a change.

New York’s Benjamin Lawsky Rattling Banks With Currency, Servicing Probes

It’s been so long that America has had a regulator that is serious about regulating that it’s hard to remember how they operate.

Bill Black: Jamie Dimon’s $10 Million Raise is a “Common Sense” Fraud Reward

Yves here. This has been such a busy week that I’ve been remiss about commenting on how Dimon’s board rewarded him despite the London Whale fiasco and the revelation of pervasive regulatory abuses. Clearly, they thought he bought the bank’s way out of trouble on the cheap, disproving the wailing in the financial firm toadying media that the Morgan bank had been ill-treated by the Administration.

Former IMF Chief Economist, Now India’s Central Bank Governor Rajan Takes Shot at Bernanke’s Destabilizing Policies

As Bernanke is about to take leave of office, attacks on his policies are becoming louder, thanks to financial markets turmoil resulting from the Bernanke/Geithner approach to the crisis: do whatever it takes to restore as much of status quo ante as possible. The problem, of course, is that status quo ante is what got us in this mess in the first place.

George Mangus Warns of Broad Impact of Emerging Markets Turbulence

In the runup to the global financial crisis, George Magnus, who was then chief economist at UBS, was one of the most insightful commentators and was early to call how bad things might get. He’s back to sound alarms about the emerging markets turmoil.

Mr. Market is Getting Frazzled Over the Fed’s Neglect of Its Pet Wishes

A brief surge of optimism, in the form of a short-lived rally in the belegured Turkish Lira and South African rand after their central banks raised interest rates to try to halt the plunge in currency values, has fizzled. And the Fed reducing its dosage of market tonic, in the form of QE, only soured investors’ already bad mood.

Mirabile Dictu! Post Office Bank Concept Gets Big Boost

Naked Capitalism readers have frequently called for the Post Office to offer basic banking services, as post offices long have in many countries, notably Japan. That idea has gotten an important official endorsement in the form of a detailed, extensively researched concept paper prepared by the Postal Service’s Inspector General.