Regulations

Are Bank Regulations Creating New Risk Pools?

Lukas Becker, writing on Risk.com, points out that the recent emphasis on “stress testing” banks, coupled with incoming leverage ratio requirements, are causing some banks, especially in Europe, to lower their long-term/less-liquid loan portfolios. As Becker notes, quoting Mark Penney, head of balance sheet management for the global markets business at HSBC in London: “We’re seeing a slight […]

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Regulations

WSJ: FBI Looking Into High-Frequency Trading

Looks like the Feds have been reading all the worried stories about HFT after all. The WSJ reports that for the last year, the FBI has been looking into whether HFT traders may be breaking the law. An excerpt: The Federal Bureau of Investigation is probing whether high-speed trading firms are engaging in insider trading […]

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Economics, Finance, Regulations

Risk In the Shadows

One sector of the financial world getting a lot off attention from economists these days is “shadow banking,” which is one term used to describe those financial institution that are not as regulated (or understood, some would argue) as the more well-known parts of the industry. In a recent post on the NY Fed’s web site, Samuel Antill, David […]

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Economics, Regulations, Society

Schiller: “The Financial Fire Next Time”

There’s a good post by Robert Schiller on ProjectSyndicate on the failure, since the financial crisis, to evolve markets to prevent another crisis. Schiller, who is a long-time advocate of expanding creative risk management options in areas such as income protection and housing, (a position I wholeheartedly support) is critical of regulators’ inability to develop […]

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Finance, Regulations, Risk

EDHEC-Risk: Was the Crisis Financial?

On the 5th anniversary of the great meltdown of 2008, it’s not a bad time to re-read a 2012 article by Noël Amenc (Professor of Finance, EDHEC Business School and Director, EDHEC-Risk Institute), wherein he made the interesting argument that hedge funds, speculators, et al. really were not to blame for the financial crisis of 2008. […]

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Economics, Finance, Politics, Regulations

FT: The Insanity Lives On

In case you missed it, check out Gilian Tett’s intreresting recap of the state of the financial world five years after the meltdown. Given the carnage that the Great Recession has left in its wake, one would expect that the financial work would be quite different half-a-decade later. Not, notes Tett, who points the following […]

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Banking, Finance, Regulations

The Lure of Quanxi: East and West

The Economist posted an interesting small piece yesterday about the current investigation of US bank’s hiring of Chinese “princelings” in their China offices. Of course, as the article points out, no one in China would be surprised to learn that the latest intern to join a team was the son/daughter/niece/nephew/etc. of a government official. As […]

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Finance, Regulations

Dark Pools, FINRA and the Observer-Expectancy Paradox

I wrote about Dark Pools back in June (https://reconnomics.com/2013/06/07/hft-update-dark-pools-raise-concerns-for-regulators-and-private-investors/), and how in this interesting corner of Wall Street traders can move large blocks of stock anonymously. Well, this week, new rules were proposed the Financial Industry Regulatory Authority (FINRA) that would force these markets to disclose trade data. As the article notes: U.S. stock-market regulators approved a plan […]

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