The Politics of Financial Reform

Over-the-Counter Underground Derivatives

Gretchen Morgenson’s description last week of just a few of the ways Timothy Geithner protected the largest banks rather than the nation’s financial system concluded with the former Treasury Secretary blocking a bill to limit the size of deposit-taking banks. (Banks, at Least, Had A Friend in Geithner) By this action Secretary Geithner was protecting the biggest banks…

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It’s a Charade

The U.S. government’s lawsuit against credit rating agency S&P hit many as it did me. It may have plenty of merit, but it appears to play a larger role in a huge, bipartisan charade. Our most powerful government officials would have the public believe that systemic risk has been vastly reduced. That isn’t true. They would…

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Bailing Out Promises

“No more bailouts!” That’s the latest campaign promise from both presidential candidates. Congressmen have claimed that regularly, too. But bailouts of the biggest banks continue. What they are bailing out may surprise you. In Congressional hearings the biggest banks want us to believe they are like the little savings and loan portrayed in the movie It’s a…

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Banks? Heck, No! They’re Great Big Hedge Funds!!!

Paul Volcker knows something you don’t know and that Congressmen don’t want to know. The biggest banks have become massive collectors of hedge funds and other alternative private investment vehicles, hidden behind a facade of traditional banking. To understand this is to understand a major reason why Paul Volcker proposed the Volcker Rule. The largest banks are no longer about traditional…

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