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 the…
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. The…
Yogi Berra advised that “when you come to a fork in the road, take it.” This is where globalization is going. The full significance of globalization sometimes still eludes us. It takes events, such as the sudden near economic collapse of whole countries, from Iceland and Greece to Ireland, the collapse of long-standing regimes like…
Yesterday I noted that the Basel Committee and the Financial Stability Board had issued reports challenging the complaints of bankers that stricter bank capital and liquidity rules and demonstrating the the proposed rules would make for healthier economic growth. I asked the question whether this might signal progress in banking regulation in the face of…
Readers may have noticed today’s WSJ article on a set of studies suggesting that the relationship between capital levels and the costs of loans is less significant than the banking industry contends. (Naturally, the Journal provides no links. I’m assuming the article is referring to this study by Kashyap, Stein, and Hanson and this one…
There was a time when we worried that concentrations of economic power would destroy competition and even distort the political process. Yet despite the fact that such distortions are in fact occurring in the financial arena, for one, we seem either less concerned or less aware of the problem than when antitrust enforcement was a…
Congress has made much more progress on financial reform than cynics might have thought. The House and Senate bills have now been passed with strong majorities and will now be reconciled in what will surely be a bruising conference committee. The conference will proceed from June 15 and Congressional leaders hope to present the final…
follow: RSS