The brokerage industry is up in arms. They want to be able to push clients into the products for which they receive the highest commissions
Okay, if you have to pay high rates to get deposits into your bank, where are you going to find borrowers that are going to pay higher than market interest rates so your bank turns a profit?
Oh, that would be subprime all over again.
There was a point, say in 2008, when many people probably thought that our largest banks were just guilty of shoddy risk management, dubious sales practices, and excessive risk-taking. Since then, we’ve had to add price fixing, money laundering, bribery, and systematic fraud on the judicial system, among other things.
…just about the only thing Dodd-Frank has accomplished is the slow destruction of small community banks.
It’s been more than five years since the peak of the financial crisis, and it seems clear (to me, at least) that not much has changed when it comes to the structure of the financial sector
The Wall Street Journal reports that the federal financial regulators may yet again carve a loophole in the Volcker Rule. This time, the issue is whether banks subject to the rule’s proprietary trading prohibitions can hold collateralized … Continue reading →
Citigroup is also the poster child for one of the key problems with our megabanks: the fact that they are too big to manage and, on top of that, the usual mechanisms that are supposed to ensure half-decent management don’t work.
It just so happens I have both a “trick” and a “treat” for you today.
First, the “trick.”
Wednesday the House passed a bill titled The Swaps Regulatory Improvement Act.
The trick is, it’s not about improving the who-really-knows-how-many trillions of dollars swaps (derivatives) market.
Five years later, and things seem marginally better in some areas (the CFPB exists), significantly worse in others (LIBOR, money laundering, London Whale, etc.). There has been some debate recently about whether we have a safer financial … Continue reading →