Banking's Past, Present, and Future
Barack Obama recently indicated that he is unlikely to reappoint Ben Bernanke as chairman of the Federal Reserve when his term expires next January. Understandably, the media is focused on who might succeed Bernanke to lead the US central bank. After all, the chairman of the Federal Reserve is often described as the second most … Read more
The UK Parliamentary Commission on Banking Standards has just released its 500+ page report “Changing Banking for the Good.” Among the report’s more intriguing proposals is the creation of a new criminal offense: “reckless misconduct in the management of a bank.” Certainly, convicting someone who brought down a bank for “reckless misconduct” would be satisfying. … Read more
…except that the furloughs now in the news are of a different kind. In this case, federal employees will be put on unpaid leave of varying lengths because of the “sequester.” The long run-up to the sequester began during the summer of 2011, when Congress and the Administration failed to reach a budget deal. Their … Read more
Follow this link to an interview with Kevin Hartnett of the Boston Globe‘s “Idea’s” section. The link includes the web debut of the cover art for my book: WRONG: Nine Economic Policy Disasters and What We Can Learn from Them, to be published by Oxford University Press in October.
The International Organization of Securities Commissioners (IOSCO) published a report this week calling for the London interbank offered rate (Libor) and other such benchmark interest rates to be tied more closely to actual transactions. Sadly, the proposal does not go far enough. I have written about Libor on a number of occasions (see here, here, … Read more
I have been named a 2013 Fellow of the John Simon Guggenheim Memorial Foundation. During the tenure of the fellowship, I will conduct research on the evolution of banking regulation across countries and US states during the last 200 years. I hope and expect that this will lead to new insights about banking regulation and … Read more
Have you ever watched a major league infielder boot a routine ground ball and thought: “For the amount of money he’s being paid, he shouldn’t make that kind of rookie mistake”? As a fan, it is frustrating. That is how we should all feel about the crises that have rocked the financial world during the … Read more
Europe has again been rocked by a crisis. The problem was first diagnosed in Ireland in January, but it very soon became clear that its tentacles extend to Britain, France, the Netherlands, Luxembourg, Sweden, Romania, and Cyprus. What is this latest catastrophe? Why, the great European horsemeat scandal of 2013, of course. News of the … Read more
A little over a year ago, I argued that the Federal Reserve should consider charging banks for the privilege of holding their reserves. The reasoning for this is straightforward: charging interest on banks (instead of paying interest, as the Fed now does) will encourage banks to come up with more profitable uses for their money, … Read more
On December 19 Standard and Poor’s raised its rating of Greek sovereign debt by six notches, to B-minus from selective default. The government’s decision to prosecute a statistician indicates that the upgrade was premature. According to S&P, the ratings change “balances our view of euro-zone member states’ determination to support Greece’s euro-zone membership and the … Read more