Future Regulation TBTF Hedging Volcker Vickers
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On Monday he joined with the five members of Britain's Independent Commission on Banking (ICB), where he updated them on changes to US financial regulation. During the one-hour meeting, Mr Volcker explained the workings of his eponymous Volcker Rule, which clamped down on the proprietary trading businesses of US-based investment banks, as well as forcing banks to separate out parts of their derivatives businesses. The meeting was the second between Mr Volcker and Sir John Vickers, the chairman of the Commission, as the ICB looks at whether the UK should institute similar reforms to the US. Mr Volcker's frequent meetings with the Commission are likely to cause concern at London-based investment banks over fears that the UK will move to impose the same type of restrictions.
Paul Volcker advises UK on financial reform
The too big to fail problem has been central to the degeneration and corruption of the financial system in the north Atlantic region over the past two decades.
Too big to fail is too big | Willem Buiter's Maverecon | FT.com
Markets / Insight - Banking regulation bill is too big to succee
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How Too big to fail creates problems for monetary and financial
Dallas Fed economists Harvey Rosenblum, Jessica Renier and Richard Alm have written an insightful paper on nthe subject. We all know TBTF is a serious concern but how does it hinder policies? In monetary policy there are 4 transmission channels – securities market channel, asset prices, wealth channel and exchange rate channel. securities market channel operates through money and capital markets, where interest rates generally move in the same direction as the federal funds rate.Though I like your post that says TBTF = TCTF. I think this is the real issue today. by Jun 15
Could be. It certainly is a good metaphore. by Jun 15
... so the TBTF, by trapping liquidity, are sort of "financial black holes"... would this metaphore catchy enough too attract journalists? by Jun 15
Very interesting perspective. For me it explains in the mechanism in modern times of the Keynes liquidity trap. by Jun 14
Too big to fail or too big to fix
It is certainly too early to point out the definite cause of the BP oil spill off the coast of Louisiana. However it is important to remember that it was the environmentalists, through pushing increasingly cumbersome regulation, who forced the oil industry to drill in ever deeper waters in the first place. We have, as described by Chicago Nobel economist George Stigler, the phenomenon of regulatory capture. In this case the regulators and oil industry have been getting too cozy with each other.
Glass-Steagall was a 34-page document. The two bills that the Senate and the House are currently chewing over as part of what may be a momentous financial reordering weigh in at a whopping 3,000 pages, combined. Yet despite all that verbiage, there are flaws in both bills that would let Wall Street continue devising financial black boxes that have the potential to go nuclear. And even if the best of both bills becomes law, investors, taxpayers and the economy will remain vulnerable to banking crises. Some will argue that these bills, at around 1,500 pages each, have to be weighty and complex if they are to curb the ill effects of convoluted and inscrutable financial instruments. That makes it doubly disappointing that the bills don’t go far enough in bringing greater transparency and better oversight of everyone’s favorite multisyllabic wonderment these days: derivatives.
Fair Game - 3,000 Pages of Financial Reform, but Still Not Enoug
(TBTF: Too Big To Fail + TCTS: Too Complex To Succeed = TCTF: Too Complex To Fix) Following the note on the central place of hedging in our lifes, here are few down-to-hearth thoughts on the on-going financial reform in the US. There were great expectations from the 2 times 1,500-page bills that Obama is trying to promoting into the Senate and the House these days (ie 3,000 pages in total). Yet the length and complexity of the texts tell a lot about the many compromises conceded to get a chance to turn them into laws. Armies of lawyers and financial advocates (doh!) are already forging their weaponry to defend their fortresses.
Financial Reform getting TCTS
As I’ve written many times in various contexts since the crisis began, being in a liquidity trap reverses many of the usual rules of economic policy. Virtue becomes vice: attempts to save more actually make us poorer, in both the short and the long run. Prudence becomes folly: a stern determination to balance budgets and avoid any risk of inflation is the road to disaster. Mercantilism works: countries that subsidize exports and restrict imports actually do gain at their trading partners’ expense.
Liquidity Trap - Krugman
How the Nation’s Only State-Owned Bank Became the Envy of Wall S
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Maybe they're even tracking this conversation. Beware....:-) by PED Jun 15
as per the Angels & Demons DVD I just watched last night... this coincidental reference to the illuminati is troubling. maybe they do rule after all. by blackswans Jun 15
Conspiracy theory readings? Really? Come on, everybody knows the Illuminati rules the world :P by barbeuz Jun 14