Bloomberg and CNN webcasting financial reform conference
A conference on financial reform has just begun at 8:00 AM today 3/3 with some major names in the lineup. It is hosted by the Roosevelt Institute and will be webcast in full from 8:00 AM to 11:00 AM at www.makemarketsbemarkets.org by CNN. Bloomberg will cover the 9:30-11:00 AM segment live.
Participants include George Soros, Elizabeth Warren, Joe Stiglitz, Jim Chanos, Lynn Turner, Simon Johnson, Judge Stanley Sporkin, Peter Solomon, Frank Partnoy, Larry White, Rick Carnell, Michael Greenberger.
For more information, please check the website, Make Markets Be Markets.
Due to last minute complications Angry Bear will not have a representative covering the conference.
“The market system depends on the discipline of failure….But the discipline of bankruptcy and restructuring has not been applied to the large complex financial institutions….When LCFIs are not penalized for failure, it sets a terrible precedent for their future behavior.”
http://www.makemarketsbemarkets.org/
I don’t get this talking point.
We DO let them fail. Look at the stock charts of AIG, Lehman, Countrywide, Bear Stearns, Wamu, Fannie/Freddie, GM/Chrysler, etc. 90%+ losses, execs gone, employees crushed.
What we DON”T allow is for one of these institutions to take down an entire sector. To just let them fail might make good political/class warfare points, but it would not be the responsible thing to do (see Depression, Great).
But Simon Johnson gives an even broader perspective on how big the too big to fails have gotten:
Fifteen years ago, the combined assets of our six biggest banks totaled 17 percent of our GDP. By 2006, that number was 55 percent. Right now, it stands at 63 percent.
Johnson also points out that:
The big four have half of the market for mortgages and two-thirds of the market for credit cards. Five banks have over 95 percent of the market for over-the-counter derivatives. Three U.S. banks have over 40 percent of the global market for stock underwriting.
http://www.nakedcapitalism.com/2010/03/guest-post-15-years-ago-the-combined-assets-of-the-6-biggest-banks-totaled-17-of-gdp-by-2006-55-now-63.html
*** Fifteen years ago, the combined assets of our six biggest banks totaled 17 percent of our GDP. By 2006, that number was 55 percent. Right now, it stands at 63 percent. ***
Well, now. That’s kind of terrifying, isn’t it?
But technically isn’t GDP a rate — dollars per year? whereas assets are a quantity? Does comparing the two numbers make sense?
http://ftalphaville.ft.com/blog/2010/01/25/133331/the-bank-problem-in-a-single-chart/#comments
http://ftalphaville.ft.com/blog/2010/01/27/135686/europe-and-volckers-rule/