Posts filed under “Credit”


Dodd-Frank has burdened small banks — and the businesses that rely on them — much more than large businesses that have access to capital markets. Is this why we’re experiencing the slowest recovery in two generations?

So asks Peter Wallison, a scholar at the American Enterprise Institute, a conservative think tank that advocates for free markets and views government regulation with suspicion.

Nonetheless, Wallison has raised a question worth asking — and answering — since he isn’t the only one who blames Dodd-Frank for the stubbornly slow recovery from the financial crisis. Just by way of background, Wallison was a member of the federal commission that studied the cause of the 2008 meltdown and was the lone member to lay almost all of the blame at the feet of the government-sponsored entities, Fannie Mae and Freddie Mac. Most scholars have concluded that the causes of the crisis were many — including deregulation of the sort Wallison has advocated — and his arguments have been widely disputed (see thisthis or this).

But leaving that aside, let’s spend a few minutes examining the assertion that Dodd-Frank, adopted in 2010 to lower the odds of another financial crisis, is responsible for the slow economic recovery.

Wallison’s argument goes like this . . .


Continues at Don’t Blame Dodd-Frank for the Slow Recovery


Category: Analysts, Bailouts, Credit, Really, really bad calls, Regulation

Bankers Launch Hostile Takeover of CFPB

Last week, we discussed several developments that have the banking industry up in arms. Each of these trace back to Democratic Senator Elizabeth Warren. The first was the new mortgage disclosure rules from the Consumer Financial Protection Bureau. The regulations consolidate several documents, mandate greater transparency in simpler language and require a three-day disclosure before a real-estate…Read More

Category: Credit, Politics, Really, really bad calls, Regulation

Changes in the Home Loan Process

A reader who happens to be a mortgage loan originator send along this awesome graphic. To me, it calls bullshit on the WSJ article I referenced this morning by sending along the following flow chart along detailing the “massive changes about to be unleashed upon real estate industry. Or not . . .   click for…Read More

Category: Credit, Real Estate, Really, really bad calls, Regulation

Oh, No! Disclosure is Going to Mess Up Housing Sales!

Starting Saturday, the real-estate industry will be subject to new disclosure rules, courtesy of the Dodd-Frank law and the Consumer Financial Protection Bureau. Lenders will be required to make transparent and complete disclosure of the terms of mortgages — including all costs and fees. This information was sorely lacking during the boom in the 2000s. Residential…Read More

Category: Credit, Real Estate, Regulation

Good News Is Bad News: Leverage Cycles and Sudden Stops

Category: Credit, Employment, Think Tank

Are Bank Holding Companies Mimicking the Fed’s Stress Test Results?

Are BHCs Mimicking the Fed’s Stress Test Results? Angela Deng, Beverly Hirtle, and Anna Kovner Liberty Street Economics, September 21, 2015           In March, the Federal Reserve and thirty-one large bank holding companies (BHCs) disclosed their annual Dodd-Frank Act stress test (DFAST) results. This is the third year in which both the…Read More

Category: Bailouts, Corporate Management, Credit, Think Tank

How to Become a Bank

Source: Bloomberg

Category: Corporate Management, Credit, Digital Media, Finance

Category: Credit, Think Tank

United Nations of Debt

Source: Visual Capitalist

Category: Credit, Digital Media

Greeks Say ‘Oxi’ to Lemon Socialism

What do Greece, Ireland and the U.S.have in common? Each experienced what was termed at the time a “new financial era” that produced an enormous expansion of its finance sector. This led to an intoxicating combination of aggressive lending, leverage and recklessness. In each case, the era ended in a financial crisis; perhaps most important,…Read More

Category: Bailouts, Credit