TURNING and turning in the widening gyre The falcon cannot hear the falconer; Things fall apart; the centre cannot hold; Mere anarchy is loosed upon the world, The blood-dimmed tide is loosed, (from William Butler Yeats’ The Second Coming (1919)) Sometime in the late 1980s bank executives discovered that their institutions should be “high...
I tell my class that a crisis can spring from the most unexpected sources. You never see the lightning that strikes you. Now we focus on some of the most obvious risks, such as a sovereign debt default. As Howard Schneider reported in the Washington Post yesterday, “European banks are facing a reckoning over...
I am one of those who believes that we cannot possibly meet the challenges presented by the modern financial system, whether global or domestic (it’s almost all the same now), by using the traditional precepts of regulation. These precepts presuppose unrealistic methods of diktat, they involve static views of the agents that operate withing...
This morning the British Independent Banking Commission (ICB) released its long-awaited Final Report. Given the clear direction signalled by the ICB in its Issues Paper: Call for Evidence released a year ago, the recommendations in the report had already been anticipated for months. The British Government has accepted the report, at least in principle....
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A few days after he made the fateful acquisition of Golden West, Ken Thompson, then CEO of Wachovia Corporation exuberantly celebrated the universal bank model that had emerged in the United States in the wake of the repeal of the 1933 Glass-Steagall Act: here is great value in the universal bank model for both...
One might be forgiven for believing that the Republicans have a death wish. No longer able to run on a credible national security platform, they appear to be positioning themselves on another four losing propositions: * refusing to lift the debt ceiling, even though business leaders as prominent as Jamie Dimon have deplored the...
This morning the Federal Aviation Authority’s head of air traffic control, Mr Hank Krakowski, resigned. He was taking responsibility for the recent incidents in which air traffic controllers were found to have been asleep on the job. The FAA Administrator has clearly decided that if Mr Krakowski did not go then he would likely...
As expected, the big banks are stepping up their campaign against tighter regulation. This week Mr Dimon, CEO of JP Morgan Chase intensified his foray against the stricter requirements of Basel III, now looming very real. Patriotism is, as always, run up the mast: the capital requirements are “Negative for America.” This notwithstanding the...
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