I’m late to write on a terrific and largely unnoticed paper presented at the Federal Reserve Board’s research conference on “Central Banking: Before, During and After the Crisis” in late March (hat tip Michael C). “A Proposal for the Resolution of Systemically Important Assets and Liabilities: The Case of the Repo Market” by Viral V. Acharya and T. Sabri Öncu could be more accurately titled, “What Financial Reform Missed.”
Read more...By Daniel Alpert, the founding Managing Partner of Westwood Capital. Cross posted from EconoMonitor
This past Sunday, Paul Krugman penned a screed in the New York Times Magazine (entitled, somewhat unflatteringly in my opinion, “Earth to Ben Bernanke”) that expanded on the content of an ongoing debate in the economics blogosphere over the contents of the mind of Federal Reserve Board Chairman Ben Bernanke.
Professor Krugman has posited for months now that Bernanke has come up short…..
Read more...At the Atlantic Economy Summit in Washington last month, Sheila Bair fielded a question about the just-released results of the latest bank stress tests. The former FDIC chief took pains to point out that they were an improvement over earlier iterations by virtue of keying off a truly dire economic scenario, but then ticked off a number of ways in which they fell short.
Read more...It’s taken a few years, but the revolt against extractive pay in banking is getting traction.
Read more...I’m not looking forward to months of pre-election image-burnishing fabrication. The nausea-inducing offering of the day, The Man the Banks Fear Most from the American Prospect, gives us an idea of what we have in store.
The good news is that this revisionist history on the craven sellout by Eric Schneiderman on the mortgage settlement appears to be in response to a damaging New York Daily News article last week.
Read more...Banks are manipulating the housing supply in an attempt to reignite a bubble to hide their losses, a strategy that’s temporarily working.
Read more...Even though other consumer debt-bombs have done more damage, student debt is producing significant social and economic distortions.
Read more...While the mortgage settlement sellout has been a singularly depressing process, once in a while there are encouraging bits of news on the bank regulation front.
An open question has been whether the Consumer Financial Protection Bureau would live up to its promise.
Read more...Regular NC readers have seen us repeatedly invoke the work of Andrew Haldane, the executive director of stability of the Bank of England. His thoughtful and original work on the risks and costs of our financial system have provided serious ammunition for reform advocates.
At the recent INET conference in Berlin, Haldane recapped some of his recent observations under the rubric of an arms race, in which efforts of individual players to improve their own position wind up leaving everyone worse off.
Read more...There’s nothing like watching someone who is already in a hole dig deeper.
Read more...Yanis Varoufakis gave an energetic, pointed, and insightful talk at the INET conference in Berlin. His message was that the efforts by European authorities were misguided, in that they were seeking to ringfence individual countries, when it was the Eurozone as a whole that needs to be shored up. And he contends this can be done now without special approvals.
Read more...Yves here. While hypocrisy is hardly uncommon in official circles, it is supposed to be kept well out of public view.
Read more...Eric Schneiderman is finding out he sold out to the Administration for far too little.
Read more...Yves here. One of the themes in this Bill Black post is that a senior official who understands the importance of effective regulation can have an impact in a relatively short period of time. It’s important to keep that in mind as a reminder that the obstacle to reining in banks isn’t feasibility but lack of political will.
Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives.
April 9, 2012 is the twenty-fifth anniversary of the most infamous savings and loan fraud, Charles Keating’s, successful use of five U.S. Senators to escape sanction for a massive violation of the law. The Senators were Alan Cranston (D. CA), Dennis DeConcini (D. AZ), John Glenn (D OH), John McCain (R. AZ), and Donald Riegle (D. MI). They became infamous as the “Keating Five.” I was one of four regulators who attended the April 9, 1987 meeting. I took the notes of the meeting, in transcript format, that were so detailed and accurate that the Senators testified that they were sure I had tape recorded the meeting. (The reality is that I owe my note taking abilities to Bill Valentine, my high school debate coach, and experience debating for the University of Michigan.)
Reviewing my (near) transcript of the April 9 offers a large number of important lessons that would have allowed us to avoid future crises.
Read more...One of our ongoing frustrations about media coverage of the mortgage mess is its failure to pay much attention to ample evidence of substantial servicer overcharges to borrowers. It’s bad enough that that happens, but far worse is that when servicers are told that they’ve been caught out, they refuse to make corrections and stonewall court-ordered remedies.
The facts that have surfaced in before one bankruptcy judge, Elizabeth Magner of the Eastern District of Louisiana, and one servicer, Wells Fargo, should give industry defenders pause.
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