I have just received a copy of a fabulous new book by Australian economist, John Quiggin: Zombie Economics: How Dead Ideas Still Walk Among Us (Princeton). I have so far had only an opportunity to dip into parts of the book, but it is proving to be one of the clearest, easy to read (which…
The big bank problem won’t go away anytime soon. There is a simple reason: financial institutions as huge and diversified as our modern universal banks are a persistently lurking threat to financial stability because if any one of them goes down we will have a major systemic problem and, as sure as night follows day,…
Barbara Rehm has a thoughtful piece in today’s American Banker on the requirement under the Dodd-Frank Act that systemically significant financial institutions be required to prepare their own “living wills.” These large institutions are required to prepare plans for how they should be dismantled in the event of looming bankruptcy. The idea is that if…
Brooke Masters describes in today’s Financial Times how the original ambition of global regulators, in the midst of the Great Financial Crisis, to develop a unified and determined approach for addressing global financial stability and averting financial crises has steadily degenerated into a diaspora of different approaches by various countries and regions. In her commentary,…
According to ABC News, President Obama is about to appoint Elizabeth Warren to a position reporting directly to the President and residing in the Treasury Department. Her role will be setting up the new Consumer Financial Protection Bureau. This is a brilliant move. Rather than getting into a fight over her nomination as permanent head…
There is much positive publicity about the new rules agreed upon at the Basel Committee. And there is no doubt that on their face they are much stricter than the old ones, requiring banks to double their level of real core capital and add a buffer of 2.5%. This means that, while banks could use…
Before anyone ever discusses the subject again, or listens to another banker bellyaching about how increased capital requirements will slow down economic growth and hurt everybody, he or she must read the scholarly study by an international group of researchers entitled “Fallacies, Irrelevant Facts, and Myths in the Discussion of Capital Regulation: Why Bank Equity…
It’s Our Money, (sung to the tune, “It’s My Party”) It’s our money and we’ll pry if we want to Pry if we want to Pry if we want to You would pry too if it happened to you Congress heads back to work a week from Monday. Consider this a late-summer serenade. Perhaps if…
The Journal of Regulation & Risk North Asia has just published its issue for the Summer/Autumn 2010. Do not be misled by the title: a sign of these global times is that the issue is full of mutually relevant commentary on issues concerning US, European and international financial regulation and is going to be an…
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