dimelab dimelab: shrinking the gap between talk and action.

forced banks Topic in The Credit Debacle Catalog

Thu 2009-10-08 17:04 EDT

After subverting bank insolvency, our leaders are now about to make a mess of liquidity

Unless there is a major change of direction among global economic and financial officialdom, we are at risk of ending up with a world in which liquidity provision is privatised and insolvency risk for banks is socialised. This would be the exact opposite of what makes sense: solvency is (or should be) a private good and liquidity is (or should be) a public good...The authorities should not waste their limited organisational capital to force banks to provide inefficiently the public good of liquidity when confidence and trust are low. They should instead focus on ways of enforcing hard budget constraints on banks - to confront them with the realities of insolvency in a way that separates shareholders, unsecured creditors, boards and managers from their investments while leaving the bank as a functioning organisation capable of continued intermediation.

leaders; liquidity; makes; Mess; subverting bank insolvency.

Tue 2009-06-16 00:00 EDT

Barron's Online

Shareholders Be Damned! by Alan Abelson; ``How the Washington gang brought Ken Lewis to heel and forced Bank of America to go through with its acquisition of loss-ridden Merrill Lynch. If everything's coming up roses, why are corporate insiders selling?''

Barron s online.

Sun 2007-11-25 00:00 EST

CDO Dumping Ground Still Sinking - Barron's Online

CDO Dumping Ground Still Sinking, by Jonathan R. Laing, Barron's Online; ACA Capital facing downgrade, destruction, forcing banks to recognize billions of CDO losses

Barron s online; CDO Dumping Ground; sink.