Subscribe to Dollars & Sense magazine. Recent articles related to the financial crisis. The Preliminary G20 Financial Reform MeetingYves Smith cautions us to view the communique with caution. She also says this on the quibble on the Basel II (which were wholly ineffective in the run-up to the crisis, and indeed contributed mightily to it) capital adequacy standards between the US and France.Simon Johnson says that assumption that we need modern (characteristic of the last 30 years) finance for economic growth, which all the G20ers seems to assume as gospel, is misconceived. He also says that modern finance has provided, more than anything else, a means for the wealthy to capture state power. The former point cannot be made emphatically enough after the bogus recapitalization of the banks. Finally, perhaps to illustrate the latter point in a particularly enraging way, here's what some of the creative minds in finance have been up to lately. Labels: bailout, banking regulation, Baseline Scenario, financial crisis, G20 summit, insurance industry, international finance, Naked Capitalism, securitization, shadow banking system, Simon Johnson Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Gillian Tett on Corporate TransparencyAs ususal, Tett does a great job. The ending is key. From The Financial Times:Idea of 'living wills' is likely to die quiet deathBy Gillian Tett Financial Times Published: August 13 2009 19:50 | Last updated: August 13 2009 19:50 Preparing a will is usually an emotionally charged experience. After all, no one really wants to ponder their demise when they are in the prime of health. Nor is it pleasant to spell out difficult issues such as how to divide up all the family silver--or not. But could the lessons learnt from preparing for death prove useful for the modern banking world? Some western regulators are tossing the idea about. In recent months Treasury officials in Washington have been scurrying to create a so-called "resolution" regime, which would make it easier to wind up large banks if they fell into a crisis. The British Treasury and central bank have gone further by suggesting that banks should be forced to write "living wills" as part of a resolution system. These documents would in essence force banks to stipulate in advance how their operations could be wound down in a crisis and how their assets might be distributed, in the hope that such clarity might help to avoid a replay of the type of panic that erupted when Lehman Brothers collapsed last autumn. What spooked regulators and investors at the end of last year was not just the bank's collapse, but the fact that it was unclear where Lehman’s assets lay, or who could claim them. Thus, by injecting more transparency--and forethought--into corporate structures, another panic might be averted, or so the argument goes. Read the rest of the article Labels: banking system, corporate transparency, financial regulation, Gillian Tett, shadow banking system Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). So Long, SuckersThis guy seems kind of like a cross between former Minnesota governor Jesse "The Body" Ventura and George Soros...From the Financial Times: Top hedge fund manager slams 'idiot' bankers Friday Oct 17 2008 15:15 A hedge fund manager who made what is thought to be one of the biggest percentage profits of all time bowed out of the business on Friday with a fierce attack on the "idiots" running big banks who were willing to take the other side of his bets. Andrew Lahde, founder of California's Lahde Capital, used his farewell letter to investors to round on the US "aristocracy" able to pay for their children to gain a top-class education. Labels: Andrew Lahde, financial crisis, hedge funds, shadow banking system Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). The shadow banking system is unravellingA grim assessment from Nouriel Roubini of the Financial Times:Last week saw the demise of the shadow banking system that has been created over the past 20 years. Because of a greater regulation of banks, most financial intermediation in the past two decades has grown within this shadow system whose members are broker-dealers, hedge funds, private equity groups, structured investment vehicles and conduits, money market funds and non-bank mortgage lenders. Read the rest of the article. Labels: financial crisis, Financial Times, Nouriel Roubini, shadow banking system Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). |
