Markets

FDIC Paints Terrifying Picture Of Bank Health

Via ZeroHedge, comes a smoking gun release today from the FDIC. I mentioned last week that the FDIC, which is essentially broke (and by the FDIC, I mean, of course, the DIF – the Deposit Insurance Fund which insures customer deposits up to $250,000), was discussing a plan to re-fund […]
FDIC Paints Terrifying Picture Of Bank Health
Markets

Why Matt Taibbi Is Dead Wrong On Naked Short Selling

Naked short selling is back in the news thanks to Matt Taibbi’s investigation of the collapses of Bear Stearns and Lehman Brothers.  Unfortunately, it sounds like Taibbi discarded his normally insightful scepticism when naked shorting caught his attention. Taibbi describes naked short selling as a kind of “counterfeiting,” which is […]
Why Matt Taibbi Is Dead Wrong On Naked Short Selling
Markets

Derivative Scaremongers Still Missing The Point

Felix Salmon responded to our post yesterday, It’s Time To Stop Being Scared By Derivatives’ Trillion Dollar Notional Values, yet failed to address the main point: For most derivatives the notional amount does not represent the amount of money at risk.
Derivative Scaremongers Still Missing The Point
Markets

DISASTER: Financial Regulation Is Getting Even More Complex

Despite all the huff and puff commentary about the dangers of complex financial innovation, a far more real threat to our economy has proved to come from complex regulations. And the problem of regulatory complexity has only become worse thanks to the plethora of programs produced in an effort to […]
DISASTER: Financial Regulation Is Getting Even More Complex
Markets

World Bank Chief Calls For Treasury, Not Fed, To Regulate Banks

The head of the World Bank will deliver a speech at Johns Hopkins today that will question the wisdom of the Obama administration’s plan to give the Federal Reserve more power over the largest banks. Instead, Robert Zoellick will argue, that power should go to the Treasury.
World Bank Chief Calls For Treasury, Not Fed, To Regulate Banks
Markets

Volcker: The Fed Should Have Full Authority

In a statement in front of the House Banking and Financial Services Committe, Paul Volcker e takes aim at several issues at the crux of the regulatory debate, one of which is the “too big to fail” concept.
Volcker: The Fed Should Have Full Authority
Markets

The Ludicrous Hysteria Over Flash Trading

First, let’s step back and remind ourselves what flash trading is: when you enter an order on certain exchanges, you have the option to elect to have that order “flashed” to members of that market centre to give them the opportunity to match prices that may be available on other […]
The Ludicrous Hysteria Over Flash Trading
Markets

How Government Aid Is Pushing Banks Off A Cliff

When the government supports the debt of financial firms, it actually makes the jobs of its executives much harder if not impossible. Whether the guarantee is explicit or implicit because the bank is Too Big To Fail, the market reacts to the government backstop in ways that make risk management […]
How Government Aid Is Pushing Banks Off A Cliff
Markets

Major Banks Cave On Debit Card Fees

Major retail banks see the writing on the wall when it comes to debit card overdraft fees. Even before Chris Dodd introduces his legislation going after them, Bank of America (BAC) and JPMorgan Chase (JPM) are going to change their policies, so consumers in what sounds like a consumer-friendly manner:
Major Banks Cave On Debit Card Fees
Markets

Paul Krugman Is Dead Wrong About Wall Street Pay

In the days and weeks that followed the government’s decision to bail out troubled banks, Paul Krugman was a reliable guide to the problem of socializing financial losses and the dangers of creating zombie banks.
Paul Krugman Is Dead Wrong About Wall Street Pay
Markets

The Fed’s Wall Street Pay Plan May Actually Make Banks Weaker

Last week the Fed revealed that it would begin to review the structure of compensation at large, important financial institutions to assess whether they were encouraging too much risk taking. This stunning powergrab–no elected official has ever voted to give the Fed this power–is a terrible idea.
The Fed’s Wall Street Pay Plan May Actually Make Banks Weaker
Markets

Insurance Regulators Shake An Angry Fist At Moody’s

Moody’s has angered insurance regulators by refusing to appear at a regulatory hearing later this week in National Habor, Maryland. And now regulators are threatening to strip the ratings agency of its status as an acceptable ratings agency for use by insurance companies.
Insurance Regulators Shake An Angry Fist At Moody’s
Markets

The Fed’s Errant Crusade To Reform Bank Pay

The Obama administration’s Treasury Department and the Federal Reserve are preparing new rules that they argue will reduce the risk to the financial health of banks that bonuses linked to performance can create. These efforts, however, are largely misdirected: our crisis was not brought about bankers recklessly seeking risk but […]
The Fed’s Errant Crusade To Reform Bank Pay
Markets

Now The FDIC Needs A Bailout

The Federal Deposit Insurance Corp may need to borrow from the US Treasury to replenish its deposit insurance fund, Chairman Sheila Bair said after a speech in Washington DC today.
Now The FDIC Needs A Bailout
Markets

The Right Way To Reform Wall Street

The Fed has apparently gotten so frustrated with the Obama administration’s inability to bring change to Wall Street that it’s taking matters into its own hands–parachuting Fed regulators into the bowels of banks to make sure their compensation policies don’t encourage inappropriate risk-taking.
The Right Way To Reform Wall Street