Sunday, December 8, 2013
My issue with the Anat R. Admati, Peter M. de Marzo, Martin Hellwig and Paul Pfleiderer, October 2013, paper.
Thursday, December 5, 2013
Performing the asset quality review of European banks will ECB’s staff have the guts to call out the mistakes of Mario Draghi?
Tuesday, December 3, 2013
Monday, December 2, 2013
The mother of all market rigging is carried out by regulators in the allocation of bank credit to the real economy.
And we read about some calling for more disclosure on foreign exchange market rigging.
Forget it! If anyone should ask about more disclosure, that should be those who had bank credit rigged against them by regulators, only on account of being perceived as “risky”, and this even though they already had to pay higher interest rates, get smaller loans and accept harsher terms, precisely because they are perceived as risky.
And this is how the rigging was carried out.
Before current Basel Accord inspired bank regulations came into effect a bank looked at how to maximize the return on equity by analyzing the lending all over the spectrum of perceived risks… and that is what can lead to an efficient allocation of bank credit in the real economy.
Not now, with risk weighted capital requirements. Now banks evaluate the returns on loans to the AAA rated, in terms of holding only 20 percent of the basic capital requirement, while when evaluating the competing return offered by a loan to a “risky” small business, and entrepreneur or a start-up, it must use 100 percent of the basic capital requirements. And, if lending to an “infallible sovereign”, then it can basically measure its returns on zero percent of basic capital requirements.
And perhaps what is the saddest of it all, might be that the bank regulators are not even aware of that this is rigging the access to bank credit all in favor of "The Infallible" and all against "The Risky"... those risky who act on the margins of the real economy and who we most want to have access to bank credit in competitive terms.
Damn these sissy regulators. God, make us daring!
Sunday, December 1, 2013
Europe’s unemployed youth, is a result of expulsing testosterone from its banking system. Is it accident or terrorism?
Friday, November 22, 2013
Thursday, November 21, 2013
Saturday, November 16, 2013
America, more bank capital (equity) required for loans to “The Risky” than to “The Infallible”, is contrary to Liberty & Opportunity
Yesterday, in the good company of friends who value liberty above all, I visited the Statue of Liberty for the first time. As a son of immigrants, though not to America, looking at her my eyes went tearful, thinking about the challenges of leaving all behind, and beginning, from scratch, a new life in a new unknown foreign country.
PS. I am not an American, but since my father was freed from a concentration camp by Americans in 1945… I confess being much biased in its favor… at least of that 1945's America.
Thursday, November 14, 2013
Monday, November 11, 2013
The Financial Stability Board evidences its utter confusion, again, with their G-SIBs list, a subset of the G-SIFIs.
Sunday, November 10, 2013
Here is THE QUESTION for Janet Yellen during her US Senate confirmation hearings as Chair of the Federal Reserve
Tuesday, November 5, 2013
Have the risk weights used in current bank regulations really been approved by the US Congress, in accordance to the Constitution?
Sunday, November 3, 2013
The silly doubling down on ex ante perceived risks is killing the Western economies... and not so softly
Saturday, November 2, 2013
Thursday, October 31, 2013
This is the mumbo jumbo that the Basel Committee bet our whole western world banking system on. Shame on it!
And these are the 3 papers referenced therein:
And on that the Basel Committee, and the Financial Stability Board bet our whole western world banking system. Shame on it! How could they?