Posts filed under “Regulation”

TARP Repayment vs Re-Regulation

Be sure to read Jack McHugh’s comments on the TARP repayment. He specifically asks:

1. With all the chatter about responsible regulatory reform, shouldn’t the rules governing bank conduct (e.g. leverage ratios, off balance sheet vehicles, etc.) be put in place before TARP repayments flow in?

2. Before TARP preferreds can be redeemed, shouldn’t the banks swear off all the other forms of federal assistance (the alphabet soup lending programs, FDIC-guaranteed debt, etc.)?

3. What exactly does “fair market value” mean when a bank desires to repurchase the equity warrants issued to Treasury in return for the emergency funding given the banks through TARP? No offense to the astro-physicists the banks have on staff, but could we ask for some third party verification of the models used to calculate the fair value of these warrants?

4. What happens if — Nassim Taleb forbid — a Black Swan appears (or even some continued erosion in our economy) that causes a bank or two to want to go back and ask the TARP to reissue them some preferred equity? Should we let them back in under anything other than truly onerous terms, if at all?

Great stuff, Jack . . .


TARP Repayment — Some Questions for the “Perfect 10″
Jack McHugh
TBP Think Tank, June 10th, 2009

Category: Bailouts, Credit, Regulation

How Congress Betrayed Investors to Help Banks

This morning’s outrage comes to us via the WSJ, and it discusses how our elected representatives rolled over for their overlords, the bankers, in grateful genuflection to their largesse: Huge heaps of lobbying monies: “Not long after the bottom fell out of the market for mortgage securities last fall, a group of financial firms took…Read More

Category: Bailouts, Credit, Politics, Regulation, Valuation

Too Few Banks, Too Many Giants

I have repeatedly mentioned Too Big To Succeed as a cause of the most recent crisis, but have you ever wondered HOW we got that way? One obvious suspect has been the easy M&A environment of the past 20 years. Instead of a very competitive market where mergers for sheer size sake is discouraged, the…Read More

Category: Bailouts, Credit, M&A, Regulation

Financial Overhaul Plan ?

Yesterday, I lamented that “So far, the Obama administration approach to bailouts has been to keep running Bush Economic Term III.” The reference was to the continuation of the Bush policies, by many of the same people involved in that prior, ruinous bailout approach. Soon, we shall find out if Team Obama’s “Change we can…Read More

Category: Bailout Nation, Bailouts, Credit, Derivatives, Regulation

Busted Banks Rebuff Regulation

Front page of the NY Times goes over the shameful behavior of banks — one of the primary causes of the entire crisis — using bailout money to pay lobbyists to maintain the regulatory status quo. Its yet another reason for why they should have been put into bankruptcy once they became insolvent. So far,…Read More

Category: Bailout Nation, Bailouts, Credit, Regulation

Blaming Clinton?

Interesting Sunday Times Magazine article on Bill Clinton. The part I found most intriguing was about the regulatory acts that the Clinton administration was  responsible for: “One thing that thrived during Clinton’s presidency, the economy, has wilted of late. The economic boom of the 1990s created nearly 23 million new jobs during his eight years,…Read More

Category: Bailouts, Politics, Regulation

The Rise of A Financial Stability Regulator

Just as the Great Depression led to the creation of new institutions and financial practices, the Obama administration is on track to impact financial regulations. One of the new concepts involves a financial stability regulator, David Wessel explains.


Category: Regulation, Video

How to Fix the Financial System

Hey, put a BandAid on that, or it might get infected! > The Committee on Capital Markets Regulation has a proposal to fix the financial. I only gave it a quick look through, but what I saw was pretty milquetoast: Here’s the highlights — a list of obvious fixes — via Real Time Economics: -Keep…Read More

Category: Bailouts, Markets, Regulation

FDIC Bank Failures (by Week)

In light of Friday’s BankUnited Failure, and our earlier post on rising foreclosures, here is an updated version of a chart I ran previously from Ron Griess of The Chart Store, showing bank failures: > Bank Failures reported by FDIC

Category: Credit, Regulation

Regulation In The Automobile Industry

Bloomberg News reports about the governments restrictions on emissions. (Political Capital)

Category: Regulation, Video