Is the Fed Playing Favorites with Too Big To Fail Banks?

By Emily Eisenlohr | July 11, 2013

“Don’t fight the Fed!” That’s the second-best known maxim in financial markets after “buy low, sell high.” But if market participants “don’t fight the Fed,” Federal Reserve actions that differentiate between Too Big To Fail banks may add to systemic risk. What makes these huge banks systemic is their interconnectedness, particularly through derivatives. Weakness in one can be transmitted…

The Fed and the FDIC: Building Goldman Sachs’ Fortress

By Emily Eisenlohr | July 1, 2013

Jamie Dimon, CEO of JPMorgan Chase, claimed his big bank has a “fortress balance sheet.” JPMorgan Chase’s balance sheet was managed better than others over the past decade. But a mighty fortress isn’t quite what the world’s top regulators would call the biggest banks’ derivatives portfolios — contractual promises of future performance that are booked OFF their…

JPMorgan Chase, Derivatives and Really Crazy Too Big To Fail

By Emily Eisenlohr | July 1, 2013

Jamie Dimon is still both chairman and CEO of JPMorgan Chase. That was a decision appropriately left to shareholders. Some may have hoped that systemic risk could have been reduced by separating the two roles at the nation’s biggest bank. Why should financial market structure center on the abilities of one man? Mr. Dimon certainly is a very talented…

Over-the-Counter Underground Derivatives

By Emily Eisenlohr | February 10, 2013

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…

It’s a Charade

By Emily Eisenlohr | February 6, 2013

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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