I would file this under the heading, we need to be seen doing something. The Fed has come up with a limit to the size of banks based on the amount of liabilities of the firm (WSJ story). This is where the combination of free market ideas and risk mitigation come into conflict. One of the first questions I ask Read More
Even planned economies can encounter trouble with lending and defaults. Such has been the case with China over the last year or so. A regulatory crackdown on connected lending and less than above board tactics has been ongoing as well. Now there is the promise that credit availability will expand, but in accordance with regulatory wishes (Bloomberg article).
My bank regulation students received their final paper topic today. This is a big one. Let me preface this by saying that I have high regard for my students. They have excellent analytical and technical abilities and I think, generally speaking, they are able to bring these skills to bear on important problems. So I decided to give them a Read More