Relevant and even prescient commentary on news, politics and the economy.

Neel Kashkari and the Minneapolis Plan to End Too Big to Fail

Neel Kashkari has been President of the Federal Reserve Bank of Minneapolis since January 1, 2016. Prior to that, he was brought over from Goldman Sachs to be Assistant Secretary of the Treasury for Stability from October 2008 to May 2009. His job was to hand out money to the banks as bailout. I believe […]

Paul Krugman Retracts a Key Part of Last Friday’s ‘Sanders Over the Edge’ Op-ed: That Sanders, rather than the New York Daily News editorial board members, don’t know what Dodd-Frank authorizes the federal government to do concerning ‘systemically important’ (a.k.a., too-big-to-fail) financial institutions. Good for him.

Which brings us to Snoopy, who has, for reasons I don’t fully understand, long been the emblem of the insurance giant MetLife. “At the end of 2014 the regulators designated MetLife, whose business extends far beyond individual life insurance, a systemically important financial institution. Other firms faced with this designation have tried to get out […]

Is ‘overbanked’ going to be a common household word?

Via The Big Picture and Ritholz comes Nervousness in over banked Europe Go no further than the following two charts to understand why markets freaked out over Dijsselbloem’s comments.    Europe is way overbanked and vulnerable to financial sector shocks.Even in the so-called “safe haven” Switzerland the banking system is outsized relative to the country’s GDP.  […]

Expounding on To Big To Fail, SEC Policy, DOJ prosecution action

Linda posted here on To Big To Fail and made suggestions as to how to fix it. I want to just add some more background information to the discussion. Via Bob Swern at Daily Kos who linked to a post by Pam Martens at Wall Street on Parade comes a bit of transcript from the […]

Addressing TBTF with tax and other policy: because "Big Banks Go Wrong, Pay Little Price"

by Linda Beale Addressing TBTF with tax and other policy: because “Big Banks Go Wrong, Pay Little Price” The New York Times today reiterated what many Americans lament–Big Banks went uncharged for serving as the main engine of the Great Recession that cost ordinary Americans jobs, homes and futures.  See Andrew Ross Sorkin, Big Banks […]

Warren questions Benanke on ‘too big to fail’

Via Bloomberg comes this snippet from testimony between Senator Warren and Ben Bernanke.  Follow the link as the embed does not seem to work. Partial Transcript via Global Economic Trends Warren: These big financial institutions are getting cheaper borrowing to the tune of $83 billion in a single year, simply because people believe government would […]

Are banks too big to jail?

Update:  Dealbook at the NYT interviews the producers of ‘The Untouchables’. Yves Smith at Naked Capitalism comments begin: Lanny Breuer, former Covington & Burling partner and more recently head of the criminal division at the Department of Justice, resigned abruptly today. The proximate cause may be a Frontline show that ran two nights ago, part […]