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...
This is not an April Fool’s joke. Yesterday Dan Tarullo, one of Washington’s leading regulatory thinkers and a member of the Fed’s Board of Governors, gave a speech in which he directly addressed the question whether very large financial institutions are detrimental to financial stability–the great question of the moment for financial reform and...
Despite the obvious hypocrisy of their assertions, some prominent bankers continue to act as if the world owes them a living. A while ago Philip Stephens of the Financial Times, echoing the views of the non-nonsense French Finance Minister Christine Lagarde, sharply criticized bank CEOs, who were demanding that they be relieved of regulation,...
This morning, in what may be her last address to the American Bankers Association (ABA) before her term ends in June, FDIC Chair Sheila Bair offered this vision: “First, I would like to propose to you a radical-sounding notion. And it is that increasing the size and profitability of the financial services industry is...
As I feast on financial crisis books, thought I’d share this tasty bit from Dean Baker’s False Profits: Recovering from the Bubble Economy. On page 9, Baker writes: “Progressives do the conservatives’ bidding when we denounce them as ‘market fundamentalists.’ We should, instead, be exposing their use of government to set up structures that...
Is there anything in particular that you oppose in the Basel III proposal? Did they go too far? You could have an opinion about various components of it but the reality is that the old Basel rules allowed people to leverage too much and we found that out. The new rules change that. We’ll...
In a great frenzy of real estate development, fueled by irresponsible bank lending, Ireland virtually blew up its entire economy. After looking like an example of the miracle of the “new economy,” Ireland now stands forlorn among the most devastated victims of the global financial crisis. Its banks have incurred some of the most...
Thomas Hoenig, President of the Federal Reserve Bank of Kansas City, in a speech to the Women in Housing and Finance, just said it again: Separate risk taking from the safety net. If too big to fail organizations cannot be effectively supervised, capitalized, or resolved – which is exactly where I contend things stand...
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