Posts filed under “Regulation”
Senators Elizabeth Warren and John McCain are introducing new legislation to “take the financial industry back to an era when there was a strict divide between traditional banking and speculative activities.”
I have a quote in the column:
“The act also kept banks that use federal deposit insurance out of potentially volatile Wall Street activities, like trading. As a result, problems at investment banks were less likely to infect regulated banks. Losses at the Wall Street operations of Citigroup and Bank of America weighed heavily on those banks during the 2008 crisis.
“For about 70 years, Glass-Steagall managed to keep the riskier, more damaging part of Wall Street away from what should be the boring, straightforward side of finance,” Barry L. Ritholtz, chief executive of FusionIQ, an asset management and research firm, said. “It was the height of stupidity repealing Glass-Steagall.”
The argument I made is summed up in this one paragraph:
“During the era of Glass-Steagall, there were no systemic banking crises like the one that occurred in 2008. The restrictions the bill put on the financial sector did not seem to do much wider harm. According to analysis of government gross domestic product statistics, the American economy grew an average of 4 percent a year from 1933 until 1999, when Glass-Steagall was in effect. Even some who championed repealing the act, like the former Citigroup chairman Sanford I. Weill, have since called for the breakup of the bank behemoths.”
As a more recent example, the 1987 crash never spilled over into the banking system. We had Glass Steagall to thank for that firebreak.
Senators Introduce Bill to Separate Trading Activities From Big Banks
NYT, July 11, 2013
Wherever you see red in the charts below, that’s when HFT received an unfair trading advantage and front ran other traders and investors. Click through, scroll down a bit, then hit start for samples of HFT front running Source: Nanex Nanex observes that: “Each chart plots trades and quote spreads from Nasdaq and…Read More
Internal e-mails implicate credit rating agencies in the 2008 financial crisis.
Money Boo Boo
Monday June 24, 2013 (04:33)
Jason Jones teaches regulation-loving Canadian bankers the advantages of harmless free-market fun.
Money Boo Boo – The Canadian Banking System
Monday June 24, 2013 (05:49)
A Market Built on Theft Sucks Themis Trading 18 November, 2011 OK. Sorry for this; long note coming. You remember the latency arbitrage that HFT said doesn’t exist? Manoj Narang, CEO of Tradework, the only HFT firm dying to speak about HFT strategy to regulators, big media, small media, industry panels, and folks in…Read More
What kind of fuckery is this? You made me miss the Slick Rick gig (oh Slick Rick) You thought I didn’t love you when I did (when I did) Can’t believe you played me out like that (Ahhh) -Amy Winehouse, Me & Mr Jones I have throughout my career in finance, studiously avoided…Read More
How Elite Economic Hucksters Drive America’s Biggest Fraud Epidemics William K. Black AlterNet, May 29, 2013 Editor’s note: This article is part of an ongoing series, “The Age of Fraud.” What do you get when you throw together economic fraudsters, plutocrats and opportunistic criminals? A financial crisis, that’s what. If you look…Read More
Six Facts Lost in the IRS Scandal by Kim Barker and Justin Elliott ProPublica May 22, 2013 http://www.propublica.org/article/six-facts-lost-in-irs-scandal In the furious fallout from the revelation that the IRS flagged applications from conservative nonprofits for extra review because of their political activity, some points about the big picture – and big donors — have fallen…Read More
> My Sunday Washington Post Business Section column is out. This morning, we look at the question: Can two senators end ‘too big to fail’? Here’s an excerpt from the column: “Just how much of a subsidy are the banks receiving? An International Montetary Fund Working Paper quantified it as creating an 80 percent…Read More