Search Results for: "new york fed"

JP Morgan Debacle Reveals Fatal Flaw In Federal Reserve Thinking

By Simon Johnson Experienced Wall Street executives and traders concede, in private, that Bank of America is not well run and that Citigroup has long been a recipe for disaster.  But they always insist that attempts to re-regulate Wall Street are misguided because risk-management has become more sophisticated – everyone, in this view, has become … Continue reading JP Morgan Debacle Reveals Fatal Flaw In Federal Reserve Thinking

The Myth Of The Resolution Authority

By Simon Johnson Back when it really mattered – last spring, during the Dodd-Frank financial reform debate – Senator Ted Kaufman of Delaware emphasized repeatedly on the Senate floor that the proposed “resolution authority” was an illusion.  His point was that extending the established Federal Deposit Insurance Corporation (FDIC) powers for “resolving” (jargon for “closing … Continue reading The Myth Of The Resolution Authority

“A Healthy Financial System Cannot Be Built On The Expectation Of Bailouts”

By Simon Johnson.  Testimony submitted to the Congressional Oversight Panel, “Hearing on the TARP’s Impact on Financial Stability,” Friday, March 4, 2011. I.                   Summary 1)      The financial crisis is not over, in the sense that its impact persists and even continues to spread.  Employment remains more than 5 percent below its pre-crisis peak, millions of … Continue reading “A Healthy Financial System Cannot Be Built On The Expectation Of Bailouts”

Tim Geithner’s Ninth Political Life

By Simon Johnson In modern American life, Treasury Secretary Tim Geithner stands out as amazingly resilient and remarkably lucky – despite presiding over or being deeply involved in a series of political debacles, he has gone from strength to strength.  After at least eight improbably bounce backs, he might seem unassailable.  But his latest mistake … Continue reading Tim Geithner’s Ninth Political Life

Greek Bailout, Lehman Deceit, And Tim Geithner

By Simon Johnson We live in an age of unprecedented bailouts.  The Greek package of support from the eurozone this weekend marks a high tide for the principle that complete, unconditional, and fundamentally dangerous protection must be extended to creditors whenever something “big” gets into trouble. The Greek bailout appears on the scene just as … Continue reading Greek Bailout, Lehman Deceit, And Tim Geithner

The Brown Amendment: Do the Volcker Rules Live?

The administration may be distancing itself from the Volcker Rules, but the same is not true of all Senators.  (Why did President Obama go to the trouble of endorsing Mr. Volcker’s approach to limiting risk and size in the banking system, if his key implementers – led by Treasury Secretary Tim Geithner – were going … Continue reading The Brown Amendment: Do the Volcker Rules Live?

Everyone Was Doing It

By James Kwak Gerald Corrigan, a Goldman Sachs executive and a former president of the New York Fed, had a curious defense of the Greece-Goldman interest rate swaps. Here are some direct quotations from the Bloomberg story: “[The swaps] did produce a rather small, but nevertheless not insignificant reduction, in Greece’s debt-to-GDP ratio,” Gerald Corrigan, chairman … Continue reading Everyone Was Doing It

Goldman Sachs And The Republicans

I testified yesterday to the Senate Banking Committee hearing on the “Volcker Rules” (full pdf version; summary).  My view is that while the principles behind these proposed rules are exactly on target – limiting the size of our largest banks and preventing any financial institution backed by the government, implicitly or explicitly, from taking big … Continue reading Goldman Sachs And The Republicans

The Obama Financial Tax Is A Start, Not The End

The flurry of interest this week around ways to tax Big Banks is important, because officials in the US are – for the first time – recognizing that reckless risk-taking in our banking system is dangerous and undesirable. But the possibility of a tax on bonuses or on “excess profits” that are large relative to … Continue reading The Obama Financial Tax Is A Start, Not The End

Gerry Corrigan’s Case For Large Integrated Financial Groups

Increasingly, leading bankers repeat versions of the argument made recently by E. Gerald Corrigan in his Dolan Lecture at Fairfield University.  Corrigan, former President of the New York Fed and a senior executive at Goldman Sachs for more than a decade, makes three main points. “Large Integrated Financial Groups” – at or around their current … Continue reading Gerry Corrigan’s Case For Large Integrated Financial Groups