Volcker Rule Is a Puzzle That Will Take Years to Understand
By Rana Foroohar
…What I’d love to see is not only a Volcker rule that prohibits prop trading outright, but also tougher capital holding requirements for banks. It’s a little known but important fact that in the years around the financial crisis of 1929 and the Great Depression (from 1929 to 1932), lots of small and regional banks went under, but no major New York bank did. Why? Because these market makers were holding between 15 and 20 % equity capital on their balance sheets — about ten times more than the average today. Prohibiting prop trading would go a long way toward lowering those ratios.
For more on the Volcker Rule, click here.
Celebrations of Too Big to Fail’s Demise Are Premature
By Simon Johnson
In a major speech last week, Treasury Secretary Jack Lew argued that we need to keep pushing forward with financial reform. He made some encouraging points about the need to reduce systemic risks arising from money-market mutual funds and for appropriate funding levels at the Securities and Exchange Commission and the Commodity Futures Trading Commission, and he spoke clearly about the need for accountability of regulators and of bank executives. But a huge misconception in his remarks threatens to swamp everything.
Lew argued that the problem of “too-big-to-fail” banks is well on its way to being fixed.
Elizabeth Warren Responds To Third Way Attack By Asking Wall Street To Disclose Ties
By DSWright, FireDogLake
Senator Elizabeth Warren is not taking the attack on her by Third Way lying down. In an open letter to the CEOs of the Too Big To Fail Wall Street banks responsible for the financial crisis of 2008, Senator Warren asks that they disclose their connections to think tanks like Third Way. That way the public will know who is paying the bill for Third Way’s attack on Warren and those asking for economic justice….
Winning the War on War
by Joshua S. Goldstein
Preeminent scholar of international relations Joshua Goldstein tears down one of the greatest myths of modern history. Despite all the hand-wringing, fearmongering, and bad-news headlines, peace is on the rise. Fewer wars are starting, more are ending, and those that remain are smaller and more localized than in past years….
Peter Higgs: I wouldn’t be productive enough for today’s academic system
By Decca Aitkenhead
Peter Higgs, the British physicist who gave his name to the Higgs boson, believes no university would employ him in today’s academic system because he would not be considered “productive” enough.