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 performance…
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 hundreds…
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 fact…
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 right…
Once again very senior figures are proposing that the scale and structure of very large financial institutions be reconsidered. Nearly every major regulatory leader has raised the question, as have many economists across the political spectrum and in both the United States and United Kingdom. To explore, one can start here and here; I can…
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