Posts filed under “Credit”

Are the Rating Agencies About to Get Their Comeuppance?

This week in encouraging news, we learn that the Securities and Exchange Commission may finally be pursuing one of the prime enablers of the financial crisis — the ratings companies. Previously, it was reported that disclosure violations were on the SEC’s radar, but truth be told, those are minor offenses.

The SEC’s Office of Credit Ratings, a division whose sole purpose is essentially to oversee Moody’s and Standard & Poor’s, seems to be stirring. The Wall Street Journal reported that the “government’s top credit-rating watchdog has kept a low profile since taking the job two years ago to help prevent another financial crisis. That may be about to change…” Multiple cases have reportedly been referred to the SEC’s enforcement division, and new regulations are due.

And a welcome change it would be. Of all the players that helped cause the financial crisis, the ratings companies have gotten off scot-free. Banks have had massive fines while many mortgage and derivative underwriters have had their garbage securities put back to them at great cost. Since 2008, there have been 388 mortgage companies that have gone bankrupt. All of that junk paper found its way into AAA-rated securitized products and derivatives. The penalty for Moody’s and S&P has been essentially nil. Fear of so-called reputational damage — the theory that concerns about their good name keeps companies in line — is the latest economic nonsense to be thoroughly debunked by events. Continues here

Category: Analysts, Bailout Nation, Credit, Really, really bad calls, Regulation

Banks Are Where The Liquidity Is

Category: Credit, Federal Reserve, Think Tank

Liquidity Risk and U.S. Bank Lending at Home and Abroad

Category: Credit, Federal Reserve, Think Tank

Contextualizing Bank Fines

click for larger version Source: BV, FT   This morning we discussed the danger that arises from merely fining banks instead of prosecuting them for violating laws. Since the news cycle is focusing on the potential multibillion-dollar fines for BNP Paribas SA and Bank of America Corp., let’s have a look at the amount of…Read More

Category: Bailouts, Credit, Crony Capitalists, Legal

Category: Credit, Think Tank

Model Risk of Risk Models

Category: Credit, Mathematics, Think Tank

Comparing Canada & America Post-Crisis

Canada’s and America’s post-financial-crisis worlds look different

 

Video

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Category: Credit, Real Estate, Video

Category: Credit, Think Tank

Big Banks = Key Players In the Drug Trade

Big Banks Started Laundering Massive Sums of Drug Money In the 1980s … And Are Still Doing It Today. It has become mainstream news that at least some of the big banks are  laundering staggering sums of drug money.  See this, this, this, this, this, this and and this. But you may not know the…Read More

Category: Bailouts, Credit, Legal, Think Tank

Why Does Everyone Hate Home Ownership ?

U.S. homeownership falls to the lowest levels in almost 20 years, blared the headlines. Lots of articles explained “Why Your Home is Not a Good Investment” and why Americans think owning a home is better for them than it is. It seems that America’s former love affair with real estate is over. Blame the recency…Read More

Category: Credit, Data Analysis, Real Estate