Liikanen Out of the Blocks

Introduction On 29 January 2014, the EU Commission published a legislative proposal and accompanying press release regarding a regulation on structural reform of the EU banking sector.  Recognising that the Bank Recovery and Resolution Directive will be unable to address the issue of “too-big-to-fail” in its entirety, and in furtherance of the political agenda to […]

The Volcker Rule is a Necessary, but not a Sufficient Condition for Macrofinancial Stability

About five years after the global financial crisis of 2007-2008, the Volcker Rule – a key part of the Dodd-Frank Wall Street Reform and Consumer Protection Act – was approved by the five financial regulatory agencies last week, and is scheduled to go into effect on April 1st 2014. As widely known, the main feature […]

Why JP Morgan Is JP Morgan

Which is to say, a basket case. Along with Citigroup, and Bank of America. We all know that JPMorgan Chase is too big to fail. We all know that this means that it enjoys the benefit of a likely bailout from the federal government and the Federal Reserve should it ever collapse in a financial […]

JP Morgan Chase and the Foreign Corrupt Practices Act

The Justice Department has just obtained documents showing that JPMorgan Chase, Wall Street’s biggest bank, has been hiring the children of China’s ruling elite in order to secure “existing and potential business opportunities” from Chinese government-run companies. “You all know I have always been a big believer of the Sons and Daughters program,” says one JP Morgan executive […]

If ‘Stop and Frisk’ Is Such an Effective Tactic, Why Not Use an Electronic Version on Potentially Corrupt Bank CEOs?

Stop and Frisk is the police tactic whereby persons arousing police suspicions are stopped, questioned, searched for weapons and contraband, and arrested if any are found. Supporters of Stop and Frisk claim this tactic has reduced crime. So why not implement an electronic version to reduce crime by financial institutions? In NYC in recent years, the number […]

What Do Banks Do? What Should They Do?

Some time back there was a bit of a kerfluffle when Paul Krugman argued that one shouldn’t bother with Minsky if one wants to understand banking. He went on to present the typical, and fatally flawed, textbook view. See here: http://www.economonitor.com/lrwray/2012/04/02/krugman-versus-minsky-who-should-you-bank-on-when-it-comes-to-banking/, and here: http://www.economonitor.com/lrwray/2013/08/28/krugman-rediscovers-the-wheel-commercial-banks-as-creators-of-money/, for my responses. A new issue of Accounting, Economics and Law […]

EBA Asset Encumbrance Rules Add to the Data Headache

Introduction On 30 October 2013, the European Banking Authority (EBA) published final implementing technical standards (ITS) on asset encumbrance reporting under Article 100 of the Capital Requirements Regulation (CRR).  The purpose of the ITS is to: create a standardised measure of asset encumbrance across institutions and in doing so provide authorities with insight into reliance […]

Randy Wray and Bill Black on the JP Morgan Settlement and Post-Shutdown Policy

Stephanie Kelton interviewed Bill Black and me for a podcast: Randy Wray and Bill Black share their thoughts on the JP Morgan settlement and post-shutdown policy. p.odca.st/6302877 Hope you enjoy it. Note: there is something wrong (still!) with my comments section. I cannot respond to comments, and most comments seem to be going into the […]

Trader Describes How Dishonesty Pays in Finance, Big Time

Yves here. It may seem like a “dog bites man” account to describe yet again how traders are fixated on their bonuses, often have tawdry personal habits (cocaine, whores, flashy cars) and have no compunction about leaving rubble in their wake, be it customers or the firms for which they work. However, it’s one thing to hear […]