Tuesday, 12 December 2017

Financial Regulation

Rajoy’s Plan for Spain: Conviction or Necessity?

December 28, 2011
in Blog

The election of Spain’s new President of Government, Mariano Rajoy, has produced quite a few expectations. His plan seems to go against the tide on some focal points regarding the problems of the European Crisis. Rajoy’s government has been described as the only government in Europe that will not increase taxes to cut the budget […]

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The Only Financial Regulation You’ll Ever Need

Posted by Tyler Watts
March 28, 2011
in Blog

Financial industry regulation has been a hot topic in the wake of the Panic of 2008 and ensuing recession. Many pundits blamed the crisis on a vaguely-defined concept of “deregulation.” Over the years, they argue, governmental oversight of financial institutions was reduced, allowing banks—especially large ones—to build up too much risk. This allows bankers’ greed […]

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“Why Financial Regulation is Doomed to Fail” – Econlog

Posted by Tom Duncan
March 16, 2011
in Blog

“Financial regulation may be the cleanest test of regulation in general, in the sense that if regulation works anywhere, it should work in the financial sector. Here, regulatory transparency is high: Banks report vast quantities of data to regulators, and regulators are easily able to check and audit the numbers. Regulatory compliance is even higher; […]

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Housing America: Building Out of a Crisis

Posted by Tom Duncan
February 23, 2011
in Blog

“About seventy percent of American households own their own homes, and for many their homes represent the majority of their net worth. As evident by the cascading mortgage market meltdown and widespread defaults and financial bankruptcies, housing policy not only affects the quality of community life but also has a direct impact on their economic […]

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“More Than Just Greed” – Miron

Posted by Tom Duncan
February 17, 2011
in Blog

“In asking whether the recent financial crisis could have been avoided, the crucial fact is that crises of various flavors have occurred for centuries in countries around the world. Thus, any explanation based mainly on recent factors — subprime lending, derivatives trading, or financial deregulation — cannot be the whole story. A full account must […]

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“Can Government Manage the Economy?” – James Payne

Posted by Tom Duncan
February 1, 2011
in Blog

“For 98 years the federal government has been attempting to prevent asset bubbles, recessions, and spasms of unemployment. In 1913, Woodrow Wilson created the Federal Reserve System, telling the country that this new institution would be “a safeguard against business depressions.” In 1929, with the Fed in operation for 15 years, the United States plunged […]

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“John Taylor: The Republicans’ Shadow Fed Chairman”

Posted by Tom Duncan
January 21, 2011
in Blog

“Taylor’s followers include the new GOP House leadership, the chairmen of key House committees, Presidential hopefuls, conservative thinkers, and others suspicious of Federal Reserve Chairman Ben Bernanke’s stimulative monetary policy and perceived alliances with Obama Administration officials. His Economics One blog is a must-read for Republicans seeking an alternative economic blueprint—and for Democrats hoping to […]

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“Dodd-Frank and the Return of the Loan Shark” – WSJ

Posted by Tom Duncan
January 19, 2011
in Blog

“Banks can also drop riskier borrowers completely. In his letter to shareholders last spring, Jamie Dimon of J.P. Morgan Chase reported that, “In the future, we no longer will be offering credit cards to approximately 15% of the customers to whom we currently offer them. This is mostly because we deem them too risky in […]

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“Near-Zero Short-Term Interest Rates May Go Lower Under FDIC Rule”

Posted by Tom Duncan
January 7, 2011
in Blog

“A planned change in deposit insurance fees for U.S. banks may lower already near-zero short-term interest rates, according to strategists at Barclays Plc, Bank of America Merrill Lynch and the Royal Bank of Canada. The Federal Deposit Insurance Corp. proposed broadening the base for deposit insurance fees to banks’ liabilities, rather than domestic deposits. The […]

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“Regulators Must Get Rules of the Road Right”

Posted by Tom Duncan
October 28, 2010
in Blog

“Americans rely on financial services to help meet their needs: for retirement, education, homeownership and indeed every aspect of their lives…  Will the new rules ensure that the costs of credit remain accessible for businesses and individuals to meet their financing needs? What is the impact of the final rules on companies’ competitiveness when they […]

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Limited Purpose Banking?

October 16, 2010
in Blog

by Jerry O’Driscoll The following is a book review from the Cato Journal, Vol. 30, No. 3 (Fall 2010). Jimmy Stewart Is Dead: Ending the World’s Ongoing Financial Plague with Limited Purpose Banking Laurence J. Kotlikoff (Hoboken, N.J.: John Wiley & Sons, 2010, 241 pp.) Chapter 1 of the book is titled “It’s a Horrible […]

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Central Banking, Limited Purpose Banking, Free Banking…

Posted by Tom Duncan
October 12, 2010
in Blog

“But if the problem isn’t in the application of the system, but it is the system, then all efforts to reform practice will fail, and fail miserably. This is what we believe the logic of economic argument leads one to conclude about central banking and government monopoly over the currency. We also believe that the […]

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Walter E. Williams – “Deregulation”

Posted by Tom Duncan
October 12, 2010
in Blog

Walter Williams, a professor of economics for George Mason University, speaks on the deregulation (or lack-thereof) that led to the financial crisis. The original video can be fond on LibertyPen.com.

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“Fed Seminar Probes Financial Reform”

Posted by Tom Duncan
September 29, 2010
in Blog

“Describing the financial industry as “hobbled, but moving forward,” Carson acknowledged the need for reform, but cautioned that not enough attention has been given to how to pay for it. ‘The cost of what is envisioned here is absolutely staggering,’ Carson said. ‘The number of people (who need to be) employed to comply with the […]

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“The Radical Banking Reform that Would End the Boom and Bust in Banking”

Posted by Tom Duncan
September 17, 2010
in Blog

“We all know what notes and coins are. They allow us to exchange the fruits of our work for the goods of others. When we deposit cash in Bank A – say £100 – we lend this money to the bank. But as soon as you make a deposit it becomes the bank’s. They then […]

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“The Political Economy of Crisis Opportunism”

Posted by Tom Duncan
September 15, 2010
in Blog

“Like a river suddenly swollen by the collapse of an upstream dam, the ideological current becomes bloated by the public’s fear and apprehension of impending dangers and its heightened uncertainty about future developments. Bewildered people turn to the government to resolve the situation, demanding that government officials “do something” to repair the damage already done […]

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“Regulators Tighten Bank Capital Rules”

Posted by Tom Duncan
September 13, 2010
in Blog

“Global authorities have settled on their punishment for banks’ role in the financial crisis: a future encumbered by the burden of significantly heavier reserves that will impede the impulse to seek profit through excessive risk taking. Senior regulators from 27 countries agreed on Sunday at a meeting in Basel, Switzerland, that lenders should be forced […]

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“Burry of ‘The Big Short’ Bets on Farmland, Gold After Profits on Subprime”

Posted by Tom Duncan
September 7, 2010
in Blog

“Gold is also a favored investment as central banks issue debt and devalue their currencies, he said. Governments haven’t adequately addressed the causes of the financial crisis and may be sowing the seeds for future problems by borrowing, he said. In the U.S., lawmakers showed they didn’t understand how to prevent another crisis when they […]

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The Contemporary Relevance of Robert Taft

Posted by Tom Duncan
September 1, 2010
in Blog

“For a conference this coming weekend, I’m reading a fascinating series of radio debates between Senator Robert Taft and Representative T. V. Smith that took place during the late 1930s. In the final installment, Taft is summing up his concerns about the New Deal. At one point he says the following, much of which could […]

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Third Point’s Second Quarter Investor Letter

Posted by Tom Duncan
September 1, 2010
in Blog

“As every student of American history knows, this country’s core founding principles included non-punitive taxation, Constitutionally-guaranteed protections against persecution of the minority, and an inexorable right of self-determination. Washington has taken actions over the past months like the Goldman suit that seem designed to fracture the populace by pulling capital and power from the hands […]

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“Fannie Mae and Freddie Mac Reform”

Posted by Tom Duncan
August 20, 2010
in Blog

“Mr. Geithner cited the possibility of giving Fannie Mae and Freddie Mac an “elegant funeral.” But that wouldn’t mean a government exit from its prominent role in America’s housing market. In fact, it could mean that the government agrees to stand explicitly behind the GSEs’ obligations, while also putting in place a new system designed […]

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“How to Feed a Recovery”

Posted by Tom Duncan
August 18, 2010
in Blog

“To get a sense of the current economic climate, I spoke with John Taylor, Stanford economics professor and George P. Shultz Senior Fellow in Economics at the Hoover Institution. He is well known in economic-policy circles for coining the Taylor rule, a monetary-policy principle that offers guidance on how to tinker with interest rates to […]

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“Lots of Regulatory Expansion but Little Reform”

Posted by Tom Duncan
August 18, 2010
in Blog

“In the wake of every financial crisis, politicians face the demand that they Do Something. They feel they have to enact something to “make sure this never happens again”—although historically it has always happened again anyway. Moving the boxes on the regulatory organization chart and expanding regulatory powers are always available options, and the financial […]

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“Nationalization of the Morgage Market”

Posted by Tom Duncan
August 18, 2010
in Blog

“On Sunday, September 7, the United States government took control of more than half the U.S. mortgage market, through its seizure—and that is the word used in mainstream press accounts—of Fannie Mae and Freddie Mac, two colossal government-sponsored enterprises (GSEs), hybrid organizations owned by private individuals yet created by the government. The likes of this […]

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“Treasury Fixing Mortgage-Finance System Juggles Limitless Bailout, Economy”

Posted by Tom Duncan
August 16, 2010
in Blog

“The U.S. Treasury Department, hosting a summit tomorrow on how to repair the mortgage-finance system, may get a blunt message from stakeholders in an industry tied to 15 percent of the country’s economy: Don’t screw it up. The system’s size and complexity mean that a wrong move by the Obama administration could restrict credit, drive […]

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“Wells Says New Regulations to Cost $530M”

Posted by Tom Duncan
August 10, 2010
in Blog

“Wells Fargo said Monday that new financial regulation will cost the San Francisco bank $530 million in lost revenue this year. The bank expects changes to its overdraft practices and other new policies will reduce its fee income $225 million, after tax, in the third quarter and $275 million in the fourth quarter.” Read more. […]

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“Who Will Regulate AIG? Who Knows”

Posted by Tom Duncan
August 6, 2010
in Blog

“There is a section of today’s second quarter filing from AIG that reads like a “Choose Your Own Adventure” book. For those out there who need a reminder, in Choose Your Adventure books readers get to choose what happens to the main character by deciding to turn to one page or another. “If you decide […]

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“Bernanke Says Rising Wages Will Lift Spending”

Posted by Tom Duncan
August 3, 2010
in Blog

“Investors and the public have been closely watching signals about the economy and the Fed’s possible policy moves to address problems. While the United States has “a considerable way to go” for a full recovery, “rising demand from households and businesses should help sustain growth,” Mr. Bernanke said on Monday in a speech in Charleston, […]

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“Fannie, Freddie Remain Unfixed”

Posted by Tom Duncan
July 26, 2010
in Blog

“With much fanfare, President Obama has signed the Dodd-Frank financial reform bill, promising the most sweeping reform since the Great Depression. This massive bill extends regulation to many parts of the U.S. economy, and adds new open-ended bureaucracies that expand the powers of government over a wide variety of financial firms. Does the bill really […]

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“New Financial Rulebook Tangles Loan Bundlers, Rating Agencies”

Posted by Tom Duncan
July 23, 2010
in Blog

“A minor rule change in the law unexpectedly shut down the market for selling new bundles of car loans and consumer loans after bond issuers, ratings agencies and the Securities and Exchange Commission found themselves caught in a tangle of old and new regulations. The SEC intervened Thursday afternoon, but traders viewed the incident as […]

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“Experts fear financial reform law will restrict credit to businesses”

Posted by Tom Duncan
July 23, 2010
in Blog

“The landmark Dodd-Frank Wall Street Reform and Consumer Protection Act is meant to bring new stability to the financial system, but there’s not a lot of love for the legislation among local banks, financial experts and business leaders, who say the law will reduce access to credit.” Read more.  “Experts fear financial reform law will […]

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“Fed Nominees Support Expanded Duties”

Posted by Tom Duncan
July 16, 2010
in Blog

“Hours before the Senate approved a far-reaching overhaul of Wall Street regulations on Thursday, President Obama’s three nominees to the board of the Federal Reserve said they were prepared to help the central bank handle its vastly expanded duties to ensure financial stability and oversee financial institutions, The New York Times’s Sewell Chan reported. “We […]

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“The Uncertainty Principle”

Posted by Tom Duncan
July 15, 2010
in Blog

“So Republicans Scott Brown, Olympia Snowe and Susan Collins now say they’ll provide the last crucial votes to get the Dodd-Frank financial reform through the Senate. Hmmm. Could this be Minority Leader Mitch McConnell’s secret plan to take back the Senate, guaranteeing another year or two of regulatory and lending uncertainty and thus slower economic […]

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“Finance Overhaul Casts Long Shadow on the Plains”

Posted by Tom Duncan
July 14, 2010
in Blog

“Farmer Jim Kreutz uses derivatives to soften the blow should the price of feed corn drop before harvest. His brother-in-law, feedlot owner Jon Reeson, turns to them to hedge the price of his steer. The local farmers’ co-op uses derivatives to finance fixed-price diesel for truckers who carry cattle to slaughter. And the packing plant […]

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Getting Off Track

Posted by Tom Duncan
July 14, 2010
in Blog

“Throughout history, financial crises have always been caused by excesses—frequently monetary excesses—which lead to a boom and an inevitable bust. In our current crisis it was a housing boom and bust that in turn led to financial turmoil in the United States and other countries. How did everything deteriorate so suddenly and dramatically? In Getting […]

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“See You Next Tyranny Day”

Posted by Tom Duncan
July 12, 2010
in Blog

“According to New York Times columnist Thomas L. Friedman in his mega-best-selling book Hot, Flat, and Crowded, China banned plastic bags a few years ago. “Bam! Just like that–1.3 billion people, theoretically, will stop using thin plastic bags,” he gushed. “Millions of barrels of petroleum will be saved, and mountains of garbage avoided.” China’s got […]

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“An Old Battlefront Returns in War on Euro”

Posted by Tom Duncan
July 8, 2010
in Blog

“In 1998, four renegade German professors tried to stop the introduction of the euro with a legal challenge in Germany’s highest court. Now, 12 years later, they are fighting against a German bailout for Greece — and this time around, people are listening to them. Wilhelm Hankel is sitting on the stage at a meeting […]

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“Haste Makes Waste in Financial Regulatory Bill”

Posted by Tom Duncan
July 7, 2010
in Blog

“The Congressional Conference Committee worked all night on Friday, June 25, finally quitting at 5:37 in the morning, so that President Obama could go to the G-20 Summit in Canada saying that Congress had finished a bill. Throughout the night comments were penciled in on the 2,315-page bill, so many in fact that the committee […]

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Highlighting Hayek

Posted by Candice Malcolm
July 7, 2010
in Blog

Is the world finally looking to the ideas of Friedrich Hayek? It appears that the intellectual debate may be heading in a new direction. Stimulus spending has done practically nothing to reduce unemployment or spur growth; instead it has merely inflated the deficit and enraged taxpayers. Instead of falling into a vicious cycle of government […]

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Keynes vs. Hayek: The Great Debate Continues

July 7, 2010
in Blog

The debates raging over what policies will pull the U.S. economy out of its Great Recession replicate one that occurred during the Great Depression. Thanks to the efforts of Richard Ebeling, a professor of economics at Northwood University, we have compelling and concise documentary evidence. He has unearthed letters to the Times of London from […]

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The Age of Turbulence

Posted by Tom Duncan
July 7, 2010
in Blog

“Alan Greenspan shares the story of his life first simply with an eye toward doing justice to the extraordinary amount of history he has experienced and shaped. But his other goal is to draw readers along the same learning curve he followed, so they accrue a grasp of his own understanding of the underlying dynamics […]

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Lessons Unlearned

Posted by Tom Duncan
July 2, 2010
in Blog

On Wednesday, I posted a link to F.A. Hayek’s “The Use of Knowledge in Society”. Like Leonard Read’s “I, Pencil”, Hayek’s knowledge paper explains why it is impossible for an economy to be centrally planned. I have mentioned this idea in earlier posts, but it is always worth mentioning again as the lessons learned never […]

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“Freshman GOP senator finds pivotal role on financial regulation”

Posted by Tom Duncan
June 30, 2010
in Blog

“With the House of Representatives poised to vote on the latest version of financial regulation perhaps as soon as late Wednesday afternoon, the political spotlight has turned to a Republican senator who has been in office for less than five months and who forced what the Obama administration had hoped would be an immediate major […]

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Money: Its Origins, Development, Debasement and Prospects

Posted by Tom Duncan
June 30, 2010
in Blog

“This book tells how money has conferred power and profits to those in positions to monopolize its production, abuse their power, and ultimately destroy the value of the nation’s economy. It tells why government has not and will not — because it can not — preserve the value of your money. It tells how we […]

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I, Pencil

Posted by Tom Duncan
June 30, 2010
in Blog

“I, Pencil, simple though I appear to be, merit your wonder and awe, a claim I shall attempt to prove. In fact, if you can understand me—no, that’s too much to ask of anyone—if you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is so unhappily losing. […]

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“Assessing Winners and Losers in Final Reform Bill”

Posted by Tom Duncan
June 25, 2010
in Blog

“Those looking for clear winners and losers after the conference committee struck a historic final agreement early Friday on regulatory reform legislation are bound to be frustrated. For every agency or industry participant that appeared to gain in the bill, there was a significant downside, while those who arguably emerged bruised and battered after the […]

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“Volcker Rule Attacked as Lawmakers Seek Fund Loophole”

Posted by Tom Duncan
June 23, 2010
in Blog

“Senate negotiators will probably offer changes today to the financial overhaul bill to soften the Volcker rule by allowing banks to sponsor hedge funds and invest their own money, within limits, alongside that of clients. The compromise, designed to win the support of at least three Republican senators, comes as lawmakers struggle to reach agreement […]

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The Housing Boom and Bust

Posted by Tom Duncan
June 23, 2010
in Blog

“Now, in The Housing Boom and Bust (Basic Books), Sowell contemplates the greatest expansion of government power in a generation, which was itself occasioned by the greatest economic crisis in as long. A quick but thorough guide to the causes of the crises, Sowell’s book shows how government policies led to a huge increase in […]

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“The Folly of Currency Pegs”

Posted by Tom Duncan
June 17, 2010
in Blog

“The current flap over the sustainability of Greece’s membership in the European Economic and Monetary Union (EMU) is reminiscent, in many ways, of the events leading up to the collapse of the Bretton Woods system—another ultimately untenable currency regime—which was put into place after World War II and terminated by the break of the dollar’s […]

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“Monetarism Defiant” – Anna Schwartz on the Fed

Posted by Tom Duncan
June 16, 2010
in Blog

“Anna Schwartz must be the oldest active revolutionary on earth. Born in 1915 in New York, she can still be found nearly every day at her office in the National Bureau of Economic Research on Fifth Avenue, where she has been tirelessly gathering data since 1941. And as her experience proves, data can transform the […]

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