Tag: Federal Reserve
Why does it have to be so complex?
The last post on the Finance Addict looked at London’s role in many recent banking scandals and failures. (Is dangerous banking a new Olympic sport, one wonders?) As that post pointed out, many of these banks were actually not British yet they were ultimately undone by activities going on in their British subsidiaries.
A new paper by the Federal Reserve Bank of New York sheds more light on the incredibly complex bank organizational structures that sprung up after the repeal of the Glass-Steagall Act. Continue Reading
Sorry, Bernanke: Too Big to Fail lives on
Yesterday was the third Ben Bernanke lecture at George Washington University, and the topic was the Federal Reserve and the Financial Crisis. I do believe that the following are the strongest words we’ve heard from Bernanke on the issue of Too Big to Fail. Continue Reading
Bernanke: the man, the legacy and the law
Fed chairman Ben Bernanke is covered in a long profile by Roger Lowenstein in the Atlantic. The sympathetic account takes the reader blow-by-blow through the criticism that he has received from virtually all quarters during his tenure as Fed chair. What Lowenstein hones in on are the reviews and criticisms of Bernanke’s performance in “resurrecting the economy” — the interest rate policy, his interpretation of the dual mandate, quantitative easing, Operation Twist, etc. But for a piece that clocks in at 8,287 words, Lowenstein pays scant attention to the emergency actions taken to save the financial system itself. Continue Reading
The end of Too Big to Fail?
Bankers are shocked at a recent turn of events: the Federal Reserve may actually prevent them from getting their way.
Dodd-Frank, the new financial law approved after the crisis, forces regulators to look at more criteria before deciding whether to approve mergers. Regulators must now consider whether combining two institutions might threaten “financial stability” — not just of the new institution, itself, but also of the entire US financial system. (Why they haven’t they been doing this all along?) Continue Reading
