Category Archives: Regulations and regulators

Did Intrade Do an MF Global?

By Rajiv Sethi, Professor of Economics, Barnard College, Columbia University. Cross posted from his blog

Yes, Virginia, HFT and Liquidity are Not All They Are Cracked Up to Be

You may have seen a big outbreak in the academic literature and business media of defenses of liquidity for liquidity’s sake, evidently prompted by increased interest in and in the EU, implementation of transaction taxes as a way to tame speculation and secondarily raise revenues.

Gas and Stock Prices: Tied Together By Speculators?

If you are old enough to remember the 1970s, the idea that gasoline and stock prices would be correlated seems bizarre.

Treasury and Fed Officials Prevaricate Before Elizabeth Warren About Whether They Will Ever Get Tough With Banks

It’s a good thing Elizabeth Warren seems to regard contending with uncooperative, evasive and obviously misleading witnesses as a form of sport. I’d want to punch them.

Even American Banker is Savaging the OCC’s Mortgage Settlement

It’s clear the OCC is winging details it should have nailed down before settling.

Congressmen Criticizing OCC Mortgage Settlement, While More Misrepresentations and Coverups Emerge

The Wall Street Journal today stresses that a lot of Democratic congressmen are unhappy about the botched settlement process but are unlikely to do more than beef because the new Comptroller of the Currency, Tom Curry, was selected by Obama.

But the more people poke at the settlement, the more creepy crawlies emerge.

Dave Dayen: Servicers Committed Loan Error Rates of Either 4.2% or 97.2%, Take Your Pick

By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen

Anyone paying a smattering of attention justifiably raised a skeptical eyebrow at the Office of the Comptroller of the Currency’s assurances to Congress that the Independent Foreclosure Reviews revealed hardly any borrower harm from servicer malfeasance. One has to marvel at this wondrous finding, particularly since just about no one who has gotten close to the records who was not paid for by banks has come up harm estimates remotely this low. Which raises another question: did the OCC lie (or more charitably, artfully fudge numbers) to Congress?

OCC Offers Lame Defense of Failure of Litigate as More Proof Emerges of its Abject Failure to Supervise Foreclosure Reviews

Elizabeth Warren’s opening salvo in the Senate Banking Committee, when she asked assembled top officers from various banking regulators when they had last litigated a case against a financial firm, drew blank stares (the SEC, which regularly files civil suits, was able to muster an answer).

Thomas Curry, the Comptroller of the Currency, addressed Warren’s question in a speech on Tuesday. However, his response was partly regulatory bromides, partly artful misdirection, and on the whole, provided more proof that regulators lack the will to regulate.

Occupy the SEC, Frustrated With Regulatory Defiance of Volcker Rule Implementation Requirements, Sues Fed, SEC, CFTC, FDIC and Treasury

Occupy the SEC has filed suit in the Eastern District of New York over the failure of the relevant financial regulators to issue a Final Rulemaking as stipulated in Dodd Frank.

Quelle Surprise! Having No Idea What Really Happened in Foreclosure Reviews, OCC Parrots “Independent” Consultant Howlers

I was prepared to give the benefit of the doubt to incoming Comptroller of the Currency Thomas Curry. But it’s really hard to do that now.

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.