Given how beleagured ratings agencies are, you would expect them to adopt the usual best policy when in trouble with authority figures: act terribly contrite and use all sorts of apologetic language without admitting to much and/or admit profusely to stuff you cannot deny, and make extremely vague but very earnest promises to do better. […]
Read more...Reader Scott pointed out this BankImplode story, “Exclusive – Wells Fargo’s Commercial Portfolio is a ticking time bomb.” I can’t verify it, but it sounded plausible and contained some juicy details: Wachovia, which Wells purchased last fall as it teetered on the brink of collapse, was so desperate to increase revenue in the last few […]
Read more...The Wall Street Journal has a headline that would warm the cockles of any populist’s heart: “Bankers Face Sweeping Curbs on Pay.” And even more impressive, who is going to rein in banker compensation? The Fed. That alone should tell you there is less here than meets they eye. Let’s look at the outline of […]
Read more...Let’s see, Leon Black of Apollo Management, which is a very savvy real estate player, warned of a coming “black hole” in commercial real estate six months ago. US bank regulators seem to be taking warnings of his sort seriously only now. The Fed is poking its nose into the portfolios of some banks, oddly […]
Read more...We’ve note during the well-warranted furor over the dreadful performance of rating agencies in assigning credit grades to structured credits, a business that was handsomely profitable to them, that it was difficult to limit their impact. Ratings are enshrined in all sorts of regulations, from the Fed’s haircuts on its discount window to its alphabet […]
Read more...By Swedish Lex, an expert and advisor on EU regulatory and political affairs. The City’s political clout in Brussels is waning as the UK’s financial industry model has gone from being the envy of the European peers to being a liability. Meanwhile, the EU will in the future probably be proposing new banking and financial […]
Read more...Oooh, this is turning out to be fun. Judge Jed Rakoff is not putting up with Wall Street business as usual (no joke, that was part of the defense offered by Bank of America for its failure to disclose the amount of Merrill bonus payments in the merger proxy sent to shareholders to approve the […]
Read more...By DoctoRx, who writes at EconBlog Review: In The Fed, the veteran journalist Martin Mayer has written a real-time prequel of the Great Financial Crisis (“GFC”) of the past two years. People may find it a good read or reread because historians have a point of view. If Mayer were a cheerleader for Alan Greenspan’s […]
Read more...Just as Larry Summers is pushing the message that the crisis is over and Team Obama deserves credit, IMF managing director Director Dominique Strauss-Kahn is telling the media the reverse, that the crisis is far from over. From Reuters: “The global economic crisis will continue, even if Germany and France had some good figures in […]
Read more...Reader Don B pointed out a generally top notch piece by Luigi Zingales at a new publication, National Affairs, on how the financial crisis may change attitudes towards what he calls “democratic capitalism”. Even though the article is thoughtful and well written, it does fall prey to a major bit of intellectual sloppiness that is […]
Read more...The Financial Times tonight reports that Goldman CEO Lloyd Blankfein made “startling” remarks in Germany, for instance, that a lot of banking activity is rather thin on redeeming social value. Oh, and he admitted bankers might be paid too much, too. Gee, with revelations like that, what might he to ‘fess up to next? That […]
Read more...This blog normally steers clear of the consumer finance space, except when it is amusing or has macroeconomic effects. But once in a while I cannot contain myself. Why does anyone have a debit card? I am deadly serious about this question. Not long ago, I switched banks, going from one end of the spectrum […]
Read more...The Japanese approach regulation very differently from the way Americans do. First, just about nothing is codified in writing. Lawyers are few and far between (by design, the bar exam is difficult to pass). If you try to get an opinion on whether a new idea will pass muster, you are certain not to get […]
Read more...While the G-20 agreement to move forward with a coordinated approach to bank capital rules and employee incentive payments is progress, it is important to recognize that what took place was effectively an apple pie and motherhood statement. The one stake in the ground was the commitment to make Tier 1 Capital a key metric. […]
Read more...Earlier this week, on the eve of a G-20 meeting, some European ministers were not only threatening to implement tough restrictions on the financial services industry, but they also asserted that the G20 was largely in alignment. That did not seem credible, particularly given the US propensity to talk tough and do very little on […]
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