Category Archives: Too Big to Fail

Next financial crisis locales? Try China and India

As I wrote on CFO.com on Tuesday, China’s domestic banks may face problems during the “great moderation” of China’s economic growth.  A recent S&P report said that the majority of China’s top banks, and many regional and national banks, “remain vulnerable … Continue reading

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A bank is hiding inside your supply chain

My latest story on CFO.com: merchant banking physical commodities warehouses aluminum derivatives price manipulation Goldman Sachs.  

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Guess who created the latest derivative product

Yep, you guessed it, the federal government. The Financial Times reported today that Freddie Mac will sell a new kind of derivative that will get private investors to take on the risk of default of $22.5 billion in mortgages. From … Continue reading

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Another kind of contagion

Prior to the financial crisis, you may recall, most of the risk management talk in the banking industry was about protecting against a bird flu virus pandemic. While the mortgage-backed securities market was turning into a toxic wasteland, global regulatory … Continue reading

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Buffett explains how to play it safe

The Seeking Wisdom blog on WordPress had a great post about the concept of margin of safety. Read it here. Among other points, he provides an excerpt of a 1984 speech on buying companies, by none other than Warren Buffett … Continue reading

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Bank execs have a laugh at our expense

Listening to two Anglo Irish Bank execs joke about a 7 billion euro bailout is nauseating, but are we really surprised conversations like this went on? This recording of an internal phone conversation between the head of the bank’s capital … Continue reading

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Capital question

Ok, so this new study from the Federal Reserve Bank of Boston is from, um, the Federal Reserve, but the results are still compelling: Our study indicates that the capital depletion during the recent financial crisis at large U.S. financial … Continue reading

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New Files to Download

The Goldman Sachs study on Too Big Too Fail, an S&P note on rising leveraged buyout valuations, and a data screen on the top companies with rising debt levels relative to EBITDA. Enjoy.

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Glass-Steagall, Part Deux

21stCenturyGlassSteagall I haven’t thoroughly reviewed the bill yet, so I am neither for or against it. But this item in the “purpose” section tickles me: (3) to eliminate conflicts of interest that arise from banks engaging in activities from which … Continue reading

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The Bankers’ New Clothes Video

Anat Admati explains her plan for fixing the global banking system. Related articles You give me a capital requirement, I’ll give you a derivative to skirt it. (mathbabe.org) Quick Take: Banks Need More Skin in the Game (thestreet.com) Why the … Continue reading

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