Category Archives: Banking industry

Richard Wolff Discusses the Failure of Capitalism with Bill Moyers

The fact of this talk is telling in and of itself: that a mainstream commentator would devote an entire segment to the idea that capitalism isn’t working. While that idea may seem obvious to many NC readers, it was supposed to remain relegated to the sphere of deviance (see Daniel Hallin’s spheres of discourse for more detail).

Big Bank Welfare Queens Unprofitable Without Government Subsidies, So Why Don’t We Regulate Them Like Utilities?

Quite a few readers excitedly sent a link to a Bloomberg editorial, “Why Should Taxpayers Give Big Banks $83 Billion a Year?” which summarizes a study by Kenichi Ueda of the International Monetary Fund and Beatrice Weder di Mauro of the University of Mainz that the editors used to extrapolate that the five biggest US banks are “barely profitable” if they weren’t able to borrow at artificially cheap rates thanks to the market perception that they are too big too fail.

The Bloomberg article, while analytically flawed, still winds up being too charitable.

Slimin’ Jamie Dimon’s Scheming to Stick the FDIC with WaMu Losses

It’s really easy to have a fortress balance sheet if you can get other people to eat your losses

Reform Suggestions for the Rogue Regulator, the OCC, and its Partner in Crime, the Shadow Regulator Promontory Group

As a follow up to our series* on how Bank of America and its supposed independent consultant Promontory Financial Group, colluded to make a mockery of a process designed to provide compensation to borrowers who had suffered abuses in foreclosures during 2009 and 2010, we thought we would offer a few suggestions as to how to forestall future fiascoes of this sort.

New Whistleblower Describes How Bank of America Flagrantly Violates Dual Tracking, Single Point of Contact Requirements in State/Federal Mortgage Settlement

Remember that big, ballyhooed mortgage settlement of early last year? The one where homeowners got $25 billion of relief (well actually only around $5 billion in cold cash, but why bother with pesky details?) The one made possible by Eric Schneiderman abandoning his fellow state attorneys general to grasp the brass ring of a do-just-about-nothing Residential Mortgage-Backed Task Force? The one that would make banks clean up their act and stop using robosigned documents and deal more fairly with borrowers?

Consent orders are seldom worth the paper they are printed on. The state/Federal settlement of early 2012 is no different.

Martin Wolf Misses the Real Reason the Eurozone’s Unhappy Marriage Has Not Broken Up Yet

The normally astute and blunt Martin Wolf is either having an uncharacteristic bout of circumspection or is managing to miss an important, arguably determining reason why the Eurozone persists in inflicting destructive austerity on much of its population.

Quelle Surprise! The Administration Wants You to Believe it is Serious About Prosecuting Banks

There are times I feel sorry for the business reporters at the New York Times.

Banks on the Counter-Attack in the Food and Finance Debate

By Jennifer Clapp, Professor in the Environment and Resource Studies Department and CIGI Chair in Global Environmental Governance, Balsillie School of International Affairs, University of Waterloo, Canada. Cross posted from Triple Crisis

NGOs have stepped up their critique of large investment banks’ involvement in agricultural commodity derivatives markets in recent months. Now, it appears that the banks are starting to fight back.

Pettis: China and the History of US Growth Models

Yves here. This is an important piece, in that it bucks conventional wisdom about growth and economic development in several ways.

Should Bethany McLean Be Bothered by the Government Lawsuit Against S&P?

Bethany McLean just released a piece at Reuters which presents a good overview of the Department of Justice case against rating agency Standard and Poor’s for its conduct in rating residential mortgage backed securities and CDOs.* The high level description of the case, in particular, why the government used FIRREA as its cause of action, is helpful.

I have mixed feeling about taking issue with McLean, since she generally does a fine job of reporting and analysis, but there were some things about her piece that were so surprising that I thought they really needed to be discussed.

Elizabeth Warren Makes Promising Start in Senate Banking Committee Hearing

The progressive blogosphere seems pleased with Elizabeth Warren’s initial foray in the Senate Banking Committee.

Ian Fraser: Stephen Hester, the Great Escape Artist

By Ian Fraser, a financial journalist who blogs at his web site and at qfinance. His Twitter is @ian_fraser. [An edited version of this article was published on pages 34-35 of the Sunday Herald on February 10th, 2013].

It has been described as the biggest banking felony in history … yet no-one has been prosecuted for the Libor fixing scandal. Ian Fraser looks at the RBS sacrificial lambs.

During Royal Bank of Scotland’s IT meltdown last summer, chief executive Stephen Hester referred to the risk “that you turn over rocks and find new things [that you have to clean up].” Last Wednesday, nearly five years on from the £45.5 billion taxpayer funded rescue of the Edinburgh based lender, a vast rock was hoisted aloft by three regulators. What lurked underneath was not a pleasant sight.

OCC Compounds Botched Foreclosure Review Process with Barmy Plan for Distributing Peanuts

The OCC is bravely trying to spin the horrorshow of its botched foreclosure reviews as some sort of positive outcome. It is apparently now trying to present its dereliction of duty in figuring out how to compensate borrowers as no big deal.

Yanis Varoufakis: Are Ireland and Portugal out of the Woods? (Updated)

By Yanis Varoufakis, Professor of Economics at the University of Athens. Cross posted from his blog

Ireland and Portugal have, recently, tested the water of the money markets with some success. But does this mean that they are out of the woods?