Battle Of The Banking Policy Heavyweights

By Simon Johnson

Just when it seemed that the debate over banking was winding down – with overwhelming victories on almost all dimensions for the people who run the world’s largest cross-border financial institutions – two of the biggest name policy heavyweights have entered the arena.  Both voices are typically listened to most carefully within official circles and yet their messages today are diametrically opposed.

Which one is right?

Speaking on the side of greater reform for the biggest banks, Mervyn King – governor of the Bank of England – gave a forceful interview to the British newspaper The Telegraph at the end of last week. 

“Why do banks in general want to pay bonuses? It’s because they live in a ‘too big to fail’ world in which the state will bail them out on the downside.”

In Mr. King’s view, casino-type banking caused the crisis of 2007-08.

 “Financial services don’t like the word ‘casino’, but instruments were created and traded only within the financial community. It was a zero sum game. No one knew which ones were winners when the crisis hit. Everyone became a suspect. Hence, no one would provide liquidity to any of those institutions.”

“We allowed a [banking] system to build up which contained the seeds of its own destruction.”

 And “reform” efforts so far do not amount to much.

“We’ve not yet solved the ‘too big to fail’ or, as I prefer to call it, the ‘too important to fail’ problem. The concept of being too important to fail should have no place in a market economy.”

Mervyn King is an opinion leader among central bankers and typically a leading indicator of what other officials will be thinking in 6-12 months.  He has also been instrumental in pushing the British government towards taking more decisive action against large banks that wish to continue operating with dangerously high levels of leverage (i.e., a lot of debt relative to their equity).

The banking policy debate in the UK remains wide open, with the independent Vickers Commission due to deliver a report in the summer, but the Bank of England is clearly on the side of wanting higher capital requirements – 20 percent is the headline number for tier one capital discussed behind the scenes (in contrast with the Basel III, which looks like to imply no more than 10-11 percent for systemically important financial institutions).  The thinking of the Bank’s Andrew Haldane (responsible for financial stability) and David Miles (member of the Monetary Policy Committee) appears closely aligned with that of Anat Admati and her numerous top-level finance colleagues (if you haven’t looked at their work before, start with this page).

In the debate so far, only one voice has been raised that rivals Mervyn King in terms of reputation in the international economics policy community — Jacques de Larosière weighed in last week, publishing a high profile op ed piece in the Financial Times (see also this news coverage).

De Larosière is the former managing director (MD) of the International Monetary Fund, 1978-87 – and widely regarded as one of the best MDs that the Fund has ever had.  His advice is taken seriously at the top level of governments.

But his views last week raised eyebrows because he came out so strongly in favor of Europe’s “universal banks”.

“With the exception of certain institutions in Switzerland, Germany, the Netherlands and the UK that excessively inflated their trading books, these universal banks have proved resilient through the crisis.”

It’s not clear why Mr. de Larosière skips entirely the difficult experience of big banks (relative to their economies) recently in Belgium, Ireland, Iceland, and Greece.

He cites the more positive experience in Canada, France, and Italy, but this is also odd – given that the Canadian success with bank regulation is largely a myth (as Peter Boone and I have explained), and the French banks were very much involved in the shadow banking system (remember that it was problems at BNP Paribas Investment Partners in summer 2007 that really signaled the start of a great financial unraveling; here is the company’s timeline and their press release at the time).  Is Mr. de Larosiere really putting so much weight on the supposed success of Italian banks – with their large exposure to sovereign debt in Eastern Europe, in the Iberian Peninsula, and at home?

In the authoritative recent assessment of European banks by my colleagues Morris Goldstein and Nicolas Veron, there is no indication that banks in France or Italy were well regulated or better supervised.  In fact, the unifying characteristic of the larger European banks is surely that they have become too big to be supervised effectively.  If anything, the Goldstein and Veron work suggests that “too big to fail” is even more of a problem in Europe – with its universal banks – than in the United States.

According to Mr. de Larosière, new regulations more broadly and the capital requirements of Basel III specifically will have negative effects on the European economy.

“Given the cost of capital and the race for deposits, they [the banks] will have to increase the price of their lending, making credit more expensive.”

This looks very much like a variant on the line that bankers are putting forward (e.g., Bill Isaac, chairman of Fifth Third Bancorp, in the pages of the Financial Times, arguing for an increase in bank dividends) – positions that have been completely and directly refuted by Professor Admati and 16 other leading experts.

Who will prevail in the minds of officials responsible for financial stability in the US, Europe and elsewhere – King or de Larosière? 

At least on the merits of the argument, King wins hands down.

But de Larosière has some powerful people at his back, including in his role as president of Eurofi.  Eurofi describes itself as a think-tank but it appears to be more of a lobby organization, funded by huge global financial institutions (see the logos at the bottom of the page in that link), including Goldman Sachs, JP Morgan Chase, and Morgan Stanley from the American side.  (Mr. de Larosière is also described on Eurofi’s website as “the Advisor to the Chairman of BNP Paribas, a position he holds since 1998” – although I understand he actually retired from this position in December 2008.)

Unfortunately, the latest indications from Europe suggest that the regulators are again caving to pressure from the side of big banks, allowing another round of weak stress tests that will do nothing to ensure there is a safe level of equity funding in the financial system.

An edited version of this post appeared this morning on the’s Economix blog.  It is used here with permission.  If you would like to reproduce the entire post, please contact the New York Times.

49 thoughts on “Battle Of The Banking Policy Heavyweights

  1. Interesting that the EU parliament recently approved an EU-wide FTT. I remain undecided on the issue; my main concern is that it would just be passed onto consumers.

    Anybody have any thoughts?

  2. Simon,

    Thank you for an excellent article. A recent blog on Naked Capitalism shows how there is growing consensus favouring heavier regulation in the UK:

    “In the red corner, we have the entire ICB, Bank of England Chairman Mervyn King, BoE Deputy Chairman Paul Tucker, BoE Director Andrew Haldane, and FSA Chairman Adair Turner all calling for radical moves in bank regulation.

    In the blue corner, we have George Osborne and some banks.”

    I totally agree about the strength of the “argument” against conjoining Retail & Investment banking, I submitted the following to the UK ICB in November:

    Click to access icb-submission-nov-2010.pdf

    In my view the evidence against Securitisation is compelling.

    I’d welcome any feedback or comments on it.

    Russell (the Forensic Statistician)

  3. Some of these commissions live off a Jack Kerouac On the Road again mentality. When to many it was plain to see the hardening effects of such a life.

    Now enter into the realm of derivatives and you are no longer in reality, its truely a dream world made of imaginary money. Had Jack been able to live some 200 years, then he could have proved us wrong, but he didn’t, and no lessons have been learned. No, it seems just the opposite will occur, a dream world waiting for Jack to return on horseback dressed in white and with a bride. Nothing less will do, and I wish I could personally be all that for the commission. But when that day arrives, I will have a $40 three layer cake waiting as they are trying to get to 99 and make all that money.

  4. Shop locally in Boulder. Compare prices, find directions and buy online from businesses found in the Shop in Boulder Financial category. Choose from stores and shops in your community.

  5. Russell, I read your icb-submission. Its just excellent summary of what went wrong and what has to be fixed. King is certainly your ally, but this battle is still not settled, and whether its going to turn out well worries me.

    Congratulations on a well done paper. ds

  6. Too bad baselinescenario’s been invaded by spam, Simon (re Boulder Financial above).

    Be that as it may, methinks part of M. de Larosière’s reaction is a reflexive French response to an Anglo-Saxon’s initiative. Sometimes, even when the reality of the situation is so overwhelming, the French are just biologically compelled to take a position contrary to the English.

    There are 1000s of years of acculturation to wade thru in trying to understand why a Frenchman would side with the heavily moneyed, monolithic financial institutions, while a Brit would side with what’s intuitively and logically defensible at every level. This seems to be the way it always plays out — Sartre can write all he wants about freedom, but when push comes to shove he remained in cafe society while Camus fought. After the war, ole’ Jean-Paul became Stalin’s No. 1 defender, while Camus continued to wrtie stuff that actually was consistent with the way he’d lived.

    I don’t mean to suggest M. de Larosière is Sartre to Mr. King’s Camus, but I guess that’s what I am saying.

  7. Too-Big-To-Fail is a false construct. Primary factors for forming policy to deal with complex economic and financial problems created by change are the measurement and management of: predictability as to known knowns relative to price determination, risk as to knowns and unknowns relative to price discovery, and uncertainty as to unknown unknowns relative to random pricing. Uncertainty is quite different from predictability and risk with serious errors stemming from treating them as the same. A rarely identified factor that stands as a constant obstacle to the effective and efficient management of change is the relationship of the component parts – predictability, risk, and uncertainty – to the connective concept of randomness.

    Randomness is the range of variability of a complex adaptive system. The primary concern is to determine how wide the tolerances may be without affecting the outcome of commercial activity by specifying the largest possible tolerance that preserves functionality. Tighter tolerances are more difficult to achieve but enhance the quality while looser tolerances are easier to achieve but may adversely affect the operation. In determining the degree of randomness the component parameters of predictability and risk can be bounded whereas the component of uncertainty cannot be bounded with any degree of precision. But uncertainty must be considered. Ignoring uncertainty is done at one’s own peril. One-size-fits-all governance metrics are too loose an operational tolerance to be functional because they lack clarity and precision due to non-correlative information such as Too-Big-To-Fail (TBTF) financial institutions that are, in reality, Too-Random-To-Regulate (TRTR).

  8. This is all such a bummer. I am so glad you keep pounding the Too Big To Fail message, Simon, but I fear it’s hopeless. I’m an Organizer by trade and experience has proven time and again for me that it’s not being right that matters, but power. I wouldn’t be surprised if your second well regarded fellow who is arguing for universal banks is doing it with some implied or quiet promises from those big guns.

    Power is what matters in the world and the people who don’t want rules have a lot of it (they have all the money).

  9. Too-Random-To-Regulate (TRTR).
    All but forgotten:
    * News
    * World news
    * Drugs trade

    Drug money saved banks in global crisis, claims UN advisor

    Drugs and crime chief says $352bn in criminal proceeds was effectively laundered by financial institutions

    * Rajeev Syal
    * The Observer, Sunday 13 December 2009
    * Article history

    “Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations’ drugs and crime tsar has told the Observer.”

  10. “Randomness is the range of variability of a complex adaptive system. The primary concern is to determine how wide the tolerances may be without affecting the outcome of commercial activity by specifying the largest possible tolerance that preserves functionality”

    Biggest Financial Crime in US History Merits Slap on the Hand: Wachovia Launders Dirty Money
    By kathleenmillar
    Sunday, August 1st 2010

    On March 17, 2010, the Office of the United States Attorney, Southern District of Florida responded to the biggest financial crime in the history of the United States by striking a deal with the perpetrator, Wachovia Bank, N.A. (“Wachovia”), one of the largest and most powerful financial institutions in the United States.

    It’s a deal that takes Wachovia off the hook for a particularly heinous form of complicity, one responsible not only for undermining the integrity of the global money system, but also for fueling the continuing drug wars in northern Mexico, violence that has claimed more lives so far—22,000 men, women, and children—than U.S. armed forces have lost in Iraq and Afghanistan combined.

    Federal prosecutors have charged Wachovia with “willfully failing to maintain an anti-money laundering program from May 2003 through June 2008, in violation of the Bank Secrecy Act (BSA).”

    But like a long list of major banks and financial institutions investigated on the same charges over the past two decades (Citibank, Bank of America, Sun Bank, Capital Bank, American Express International) Wachovia will not be prosecuted for violating the Bank Secrecy Act—no U.S. bank has ever been indicted on these charges.

    Instead, the feds have offered Wachovia what has become a familiar alternative in the complex universe of international finance. Called a “Deferred Prosecution Agreement,” it is a handy legal mechanism that turns on the fulfillment of a promise by Wachovia to beef up its anti-money laundering regime and abstain from any further violations of anti-money laundering regulations or the Bank Secrecy Act for a twelve-month period. If Wachovia makes good on this pledge, the bank will be in the clear on March 17, 2011.

    Wachovia, which took in $378.4 billion (1/3 Mexico’s GDP) from a handful of casa de cambios over a 3 year period ( 2004-2007), and enjoyed a profit of 2.9 billion in 2009, has also been ordered to pay this $160 million in fines and penalties to the General Fund, a sop, and some might say, an unprecedented insult to justice and the American public.

    The most common defense–don’t monkey with the financial market–is one that has gained purchase given the global economic downturn over the past two years.


    “- Iceland’s financial regulator has identified at least 13 cases of cross-border banking malpractice that will lead to prosecution in a number of countries, the Financial Supervisory Authority said.

    “More than half of the alleged crimes that were committed in relation to the collapse of Iceland’s banks have international ramifications,” Gunnar Andersen, chief executive officer at the Reykjavik-based FSA, said in an interview.”


    FinCEN�s mission is to enhance U.S. national security, deter and detect criminal activity, and safeguard financial systems from abuse by promoting transparency in the U.S. and international financial systems.
    FinCEN Observes Consumer Protection Week
    March 6 � 12

    FinCEN Helps Financial Institutions Serve Customers Not Criminals

    Elderly Financial Exploitation
    FinCEN Observes Consumer Protection Week
    March 6 � 12

    FinCEN Helps Financial Institutions Serve Customers Not Criminals

    Mortgage Foreclosure Rescue and Loan Modification Scams
    FinCEN Observes Consumer Protection Week
    March 6 � 12

    FinCEN Helps Financial Institutions Serve Customers Not Criminals

    Home Equity Conversion Fraud
    FinCEN Observes Consumer Protection Week
    March 6 � 12

    FinCEN Helps Financial Institutions Serve Customers Not Criminals

    Reports of Fraudulent Phone Calls
    FinCEN Observes Consumer Protection Week
    March 6 � 12

    FinCEN Helps Financial Institutions Serve Customers Not Criminals

    Financial Fraud Enforcement Task Force
    FinCEN Observes Consumer Protection Week
    March 6 � 12

  13. King can’t win. Except by default, when the banking system fails worldwide. King can’t win because he just doesn’t have the backing of the most powerful interests, who have, on a global basis, bought the system that they want, and they don’t really care. They are the parasite destined to kill the host.

  14. David,

    Thank you for taking the time to read it and for the nice feedback.

    Hopefully I have written something that is academically compelling but also understandable to the public at large.

    I only hope that this message gets through!

  15. Throw in the to important to fail TITF, and you are another 2 weeks away from commenting on those consequencial people.

  16. There is a being right -vs- power struggle presently occuring among the money holders. I just bought another # yesterday myself.

  17. Bill Gates’ was probably channelling Boyko before his latest TED appearance. He’s talking about state budgets and refers to GAAP as the “gold standard” in accouting, smears California’s treasury as being worse than Enron, and on one slide compares the expenditures of the State of California, Microsoft, and Google, trying to show (I think) that California is spending way too much money.

  18. @ markets.aurelius

    You can thank Ivan “The Terrible” Boesky…and his cohort hidden under a pile/ mountain of rubies, the “King of Toys” wanna-be Michael Milken. Please, let us not forget that wolves travel in packs – such as “Where’s Waldo[?]” would have it…somewhere in the “Black Forest Undergrowth” you’ll probably find feces of Martin Siegel, and Dennis Levin all over the “Blue Gold Rush!

  19. @ Messrs. Sneelock, Weatherby, Woych, and Forensicstatistician

    Given the troubling trend of larger and more frequent boom-bust cycles, why do you think that TBTF is the correct construct? To illustrate, the Crash of 1987 experienced a $1trillion decline of wealth. Fourteen years later, in 2001, the Dot-com Crash witnessed a decline of wealth of $4 trillion. Seven years later, in 2008, the Subprime Crash saw an $8 trillion decline of wealth. Why do I believe that TBTF is a flawed construct? Vapor Assets, the second derivative indicator that a Minsky Moment is about to occur leading to a financial crash. Bad information leads to flawed price discovery and random pricing that creates “vapor assets”.

    Recall the S&L meltdown, where the indeterminate “asset” on the books of many insolvent S&Ls was “regulatory goodwill” – the regulator’s reward for acquiring an even more insolvent thrift. Who could have foreseen the Resolution Trust Corporation’s (RTC) liquidations that occurred when minimum reserve requirements became illusory in a setting where capital consisted of vapor assets? Shortly thereafter, “Dot Comets” that had their initial public offering priced at 200 percent of forecasted sales soon became financial road kill when their projections were not met. Collateralized debt obligations (CDOs) and credit derivative swaps were the subprime boom’s vapor assets where NINJA mortgagors were given property rights in order to enable questionable securitizations at even more questionable AAA-ratings prices to take place (NOTE: Forensicstatistician, read your ICB submission, very good would like to discuss with you on your blog). But when the bubble burst, “questionable” became “improbable” as deterministic metrics lacked robustness to manage indeterminate investments.

    Simply put, the same folks who were in charge of watching Madoff, were also in charge in valuing the hole-in-the-donut vapor assets for the purpose of determining capital compliance. Private sector greed and public sector errors of omission are a reflexive proposition. Unless and until risk (probabilistic expected values that are measurable) is differentiated uncertainty (unknown-unknown, instruments having negative cash flow that are marked-to-model) TRTR errors of conflation will continue to result in noncorrelative information that produces larger and more frequent boom-bust bubbles.

    From an investment perspective, it is what Taleb argues in the “Black” when he says that “correlation is charlatanism.” And, what I argue in “We’re All Screwed (page 82) from a governance perspective that “protection is a racket, whether enforced by Don Corleone on the streets of New York, or Don Columbia Law School at a government regulatory agency.” For illustrative purposes, if Citigroup’s one-size-fits-all financial supermarket could not cross-sell, then Elizabeth Warren’s one-size-fits-all deterministic metrics cannot cross-regulate conflated, non-correlative information at the CFPB.

  20. There is an old saying ” There is a law for uins and a law for wein and they AINT the same law”. For those that need an interpretation, There is “your law”, and then there is “the law”, of which, will be applied to your law as soon as I can gather the tools to do so. No matter what day of the week.

  21. Given the troubling trend of larger and more frequent boom-bust cycles, why do you think that TBTF is the correct construct?

    I never said that it was! And really don’t give a hoot about your numbers and stats thing, you keep bringing it up and juggling hard, but the mortician has gone away and won’t be back till tomorrow, adventure time.

  22. Mervyn King; “Why do banks in general want to pay big bonuses?”

    Let’s generalize for a moment, with some comparisons.

    The world’s “Top 10 Private Banks” lost big time…2008/09/10 now with an estimated worth of ~$16.5tn as of July/2010. The wealthy investors are spooked to say the least and fearful of the future because of the blatant malfeasance and greed of the public sector banks!

    The other side of the coin we have the public banks in a win-win situation – can’t lose? But who really lost were the shareholders on the commercial and investment side. But we’ll never know because of no transparency. The banking administration won the pot – the “Casino Houses’s” never lost period! Whoa to the ignorant plebeian’s? Casino’s aren’t structured on a buy/ sell side, but only on the sell side – what kinda sense does that make even if you gamble in a fix?

    The big banks will fight tooth and nail to put up as little as possible of their free money…a minute fraction in collateral because of a foolishly lame argument/ excuse as competition! From whom I ask?
    The world’s largest private banks literally and figuratively got washed out…so where’s the competition?

    I believe King can split this insane rationale postured by the banks just as he’s proposed – either or, but not both. A spin-off of America’s Glass-Steagall Act lost in the holistically past and present confusing the mean, with a thorough thrashing of the Dodd-Frank Act into the trash-bin! JMHO

    American History: “How Foreigner’s Helped Finance Our (America’s) Greatness with all Respect”

    “The Louisiana Purchase (1803)” was financed by Francis Baring and Co. (England), and Hope & Co. (Amsterdam/Netherlands)***Not Napoleon***ie.France)! for $15ml/ $3ml down! Old fashion Bankers – Period!

    “The Alaskan Purchase (1867)” was financed by another good old fashion bank…this time an American home-grown bank for $7.2ml (Gold) paid to Russia.
    Funny…if Russia,France,Spain, and Great Btitain weren’t always at each others throats I sometimes wonder…?
    My point being that these bankers all functioned with the highest of fiduciary responsibility regarding the true nature of “Banking” – for the people, and for a better future.

    PS. Riggs Bank actually gave the $7.2ml to the United States with no strings attached! How’s that for “Fiscal Altruism”! England can stand tall and teach America some fiscal responsibility by example! May the Pride of the British Crown be on your side Mr. King :-))
    Thankyou Simon, and James

  23. If I use a word that is even marginally a swear word on this blog, my post does not go live.

    Yet a baldly commercial message like that of “Boulder Financial” is not only posted, but allowed to remain.

    THAT’S obscene.

  24. Everyone who reads these comments is a fat headed idiot. We will take advantage of you in more ways than you can imagine, so come right in and let us service you.

  25. . . just me folks, and that is one way to deal with spammers. Follow suit if you like, get creative. Give them all the free advertising they could ever desire.

  26. All people who live in Boulder are unsophisticated rubes, and the smart bankers have migrated here to reap the suckers. We are the best in town so come in and let us do you with a smile.

  27. Okay, I was following along just fine, and filling in the blanks with the human archetype who was targeted with every step of the Watchoveryou money laundering, er, I mean, “bad loans”,

    and based on how many millions of jobs disappeared in a 3 month period right after Paulson’s 3 page this-is-a-stick-up note to the taxpayer,

    but I lost it with the very last sentence of your piece, “forensicstatistician”, wth does this mean…? It’s too Brit-English for me:

    “Continuing with the status quo appears akin to leaving ones back door constantly on the latch.”



  28. We are the kind of people who push an advertisement into this discussion about what is going wrong with the financial system. Hmmm, could it be we are part of the problem instead of part of the solution? Ah, yes, we are just the type of bank you folks should be doing business with.
    . . . free ad compliments of mondo

  29. They dismantled the statue put up by the “cult of dzierzynski”, read about that fact on wikipedia for Polish language readers…

    Ah yes, March, the month when all slavic peasants tire of cannibalism and start planning for the planting of potatoes, cabbage and carrots – those nice knee pads on the gardening website are just a tad too pricey for such a utilitarian purpose compared to the creativity one can call upon based on what else is already on hand (old pillow and a plastic bag from the grocery), but you guys can probably afford them, and appreciate their specialization when doing routine *POWER* brown-nosing….

    Yes, an amazing replay of history, but not quite as interesting as “local” politics in USA – going after the honest agriculture wealth of the cheese heads…

    Still, a *fascinating* story to watch unfold in The Russian Federation, no doubt about it.

  30. As always, the comments are more interesting than the article:

    “Madam today you write or paraphrase:

    ‘EU governments need to run a budget surplus of 1.6% of GDP for the next two generations if baby boomers are going to come close to paying the cost of their extended old age.’

    My! my!
    Ms Flanders, is this yet not another swipe at baby boomers ?

    Do you mean to say that any group should be self financing as they pass through Life ? Or do you mean that all current and some future generations will have to finance greedy/needy baby boomers in their old age ?

    Look at both sides of the balance sheet! This generation paid in the main for WW2.

    This is the generation that leaves after the devestation of war:

    a legacy of roads, schools, universities and hospitals,

    a significant addition to the National Housing Stock,

    and an extensive development of Human Capital in medicine, technology and scientific progress.”

    What do Gen X techno-kleptocrats leave behind?

    “money” as debt in some kind of matrix

    honestly, hedge hogs the answer to kleptocratism?


    (rolling on the floor laughing)

  31. Annie,

    Apologies for the Brit-English phrase.

    It means to leave the door unlocked.

    Securitisation is the black hole vortex through which the Investment Banking arm can leech the Retail deposits. With that stargate wide open the vortex will strip out our nation’s assets at warp speed. It must be closed shut.

    Thanks for taking the time to read the whole article!

    If you agree with it, please help to spread the word.

    P.S. I recommend the following site too, where I have occasionally guest posted:

  32. After WW2 bretton woods, Keynes English Central Bank called for a world central bank and a ‘bancero’ currency. Overruled by the U.S.A who made the USD the reserve currency giving them a distinct advantage. Keynes was proved right by time. The BOE are not as influential as they would like to be. They may be proved right by time again.

  33. I agree with “securitization”, I agree with Triple AAAs being forever “grandfathered” and gettin lowest interest rates and that that does nothing for managing the expectation of 7 billion people on the planet,

    I could go on and on – it’s been a year and a lot of posts have bee written – more words than “13 Bankers”?

    Bottom line is hate and revenge fueling the “greed” and lust for *POWER*.

    It’s a war now – sorry – justice demands it.

  34. The brown nosers have no clue what a JOKE it is to turn the topic back to YET ANOTHER navel-gazing, psychobabble round of rationalizations is what p-sses people off the most and LIGHTS THE FIRE OF VIOLENCE:

    From Wiki:

    “Just War theorists combine both a moral abhorrence towards war with a readiness to accept that war may sometimes be necessary. The criteria of the just war tradition act as an aid to determining whether resorting to arms is morally permissible. Just War theories are attempts “to distinguish between justifiable and unjustifiable uses of organized armed forces”; they attempt “to conceive of how the use of arms might be restrained, made more humane, and ultimately directed towards the aim of establishing lasting peace and justice.”[7]
    The Just War tradition addresses the morality of the use of force in two parts: when it is right to resort to armed force (the concern of jus ad bellum) and what is acceptable in using such force (the concern of jus in bello).[8] In more recent years, a third category — jus post bellum — has been added, which governs the justice of war termination and peace agreements, as well as the prosecution of war criminals.
    Anarcho-capitalist scholar Murray Rothbard stated, “a just war exists when a people tries to ward off the threat of coercive domination by another people, or to overthrow an already-existing domination. A war is unjust, on the other hand, when a people try to impose domination on another people, or try to retain an already existing coercive rule over them.”[9]”

  35. Tomorrow, global banks like Barclays, HSBC, JP Morgan and Goldman Sachs will ensure that the Tokyo markets will open and remain functional. This would not have been possible if each of these banks were 10 smaller banks.

    These banks will provide liquidity to the FX, JGB and equity markets and will be able to disburse loans and conduct normal transactions because they are integrated to their overseas entities. So, if Toyota wants to move funds from Detroit to Tokyo and pay their employees and suppliers they just need to deal with one bank which will convert the FX, transfer the funds and disburse the amount.

    Send Simon Johnson to jail for academic fraud and tank god for global banks!

  36. @ DG – ?

    Japan owns ~$912 bn US Debt behind China’s ~1.2tn all surrogates of the massive Federal Reserve Debt! Japan won’t be buying our debt anytime soon, but rather selling…and that has more than a few people worried?

    The word is out – it’s survival mode – it’s time to cash in – deafness falls upon sovereign debt ratings by S&P downgrade – it’s time for action – it’s time to emasculate the blood sucking global banksters – it’s time to step up, in which I mean, the Japanese people are at their greatest when adversity calls!

Comments are closed.