Wallace Stevens’ Thirteen Ways of Looking at a Blackbird came to mind Friday while watching bankers and regulators testify before the Senator Levin-lead bipartisan subcommittee hearing on “JPMorgan Chase Whale Trades: A Case History of Derivatives Risks and Abuses.” I was prepared to take notes and tweet (no pun intended), having carefully reviewed the subcommittee’s…
Teaching and research distractions have again kept me from blogging for a while. I guess my defense is that learning the facts is always an important precursor to writing about them. This morning, however, I decided to divert from class preparation to add my praise for what is surely destined to be the BOOK OF…
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…
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 financial…
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…
The best way for us to approach financial reform is to understand financial markets and the financial system itself as a series of highly complex adaptive systems–a rich and diverse ecology. These ecologies are continually evolving. They are inhabited by highly complicated organisms–all behaving in very complicated ways–such as banks, exchanges, regulators and people. Adopting…
I have been away so have only now been able to read this spectacular piece by Philip Stephens of the Financial Times. For those unlucky enough not to have a subscription to this splendid daily, I could not resist pushing the limits of fair use with a few quotes. It is time to make Britain’s…
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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