The Myth of the Tough Financial Regulator
There is a myth being pushed by the business media that any living regulator was ever tough on Wall Street. It simply... Read More
Hedge Fund TCI Points Out Asset Managers’ Hypocrisy When it Comes to Disclosure
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First, it was TCW admitting asset managers had used investor funds to purchase trillions of dollars of opaque bonds they cannot value... Read More
Fix for Rating Firms Shows Dodd-Frank Designed to Fail
The primary purpose of the Dodd-Frank Act was to prevent real reform of the financial system. It was very successful at that.... Read More
Volcker Rule Rewritten to Wall Street’s Exacting Specifications
Under the leadership of the Trump Administration, financial regulators rewrote the regulations enforcing the Volcker Rule. The reason given for this action... Read More
Central Bankers Have Only Themselves to Blame for Their Failures
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Raghuram Rajan, a University of Chicago professor, former head of India’s central bank and one of the handful of economists who predicted... Read More
MMT: I say tomaato, they say tomato
In an earlier post, Even with MMT, Economics still struggles with financial crises, I managed to convey much more disagreement with the advocates of... Read More
Stress Tests and the Black Hole Surrounding Derivatives
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Regular readers know I have been consistently critical of the Office for Financial Research. Today, courtesy of Pam and Russ Martens, it... Read More
Paul Volcker on Why Regulations are Not a Good Substitute for Transparency
In the 1930s, policymakers faced a decision on how to prevent future financial crises and another Great Depression. They could redesign the... Read More
Society’s Risk Appetite versus Banks’ Risk Appetite
Two unanswered questions since the beginning of the Great Financial Crisis are how much risk does society want banks to take and... Read More
Bank Stress Tests Shouldn’t be Relied On
Periodically central bankers cannot help themselves and they actually tell the truth. The latest example is New Zealand’s Reserve Bank Governor Adrian... Read More
The Myth of Financial Regulators Anticipating a Crisis
Financial regulators remind me of the drunk looking for his lost car keys under the street light because that is where the... Read More
Biggest Lesson of 2008
The biggest lesson of 2008 is opacity is the necessary condition for a financial crisis to occur. Investors panic and rush to... Read More
The Veil of Opacity Is Needed for Bank Scandals to Occur
Why is anyone surprised when bankers engage in misbehavior behind the veil of opacity? They shouldn’t be. In the 1930s, the Pecora... Read More
The Economics Profession Chooses Ignorance
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The Economics profession is still without an explanation for why the Great Financial Crisis occurred that doesn’t leave out inconvenient facts. Specifically,... Read More
The Illusion of Technocratic Competence
The Economic profession’s and the financial regulatory community’s illusion of technocratic competence is like Dracula. It refuses to die. Wouldn’t you have... Read More