William K. Black on MF Global

Bill Black was on Capital Account talking to Lauren Lyster about MF Global. As usual, Capital Account delves deep into the real issues. Black never disappoints. Video below

Debt and Democracy: Has the Link been Broken?

Debt and Democracy: Has the Link been Broken

News Links: Ten days of secret planning to rescue markets

News links for 3 December

Warren Mosler’s Big Fat Greek MMT Exit Strategy

It is beginning to look like a Greek exit is ever more likely, which means that the end of the EMU could be near.

Even if exits and a break-up are not inevitable, countries should have a plan on the shelf. It is clear that Germany is going to insist on the maximum austerity it can squeeze from nations facing a run on their debt. Hence, if nothing else, an exit strategy is required for negotiations. The best strategy would be for all the so-called PIIGS to band together with a believable threat to exit together. That could finally break the logjam.

I’m not optimistic about that. In any event, it is time to examine proposals for dissolution. Warren Mosler has formulated what looks like a nice, clean exit strategy that EMU members can adopt. I am reprinting here with his permission

Regulatory handicapping: the CFTC edition

And just two days after I reported on the starve-the-beast strategy that’s forcing the SEC to pursue Mickey-Mouse settlements with the big banks, we learn of plans to handicap the Commodities and Futures Trading Commission in a similar fashion

Regulators encouraging banks to game risk models

Andrew Haldane, in my opinion, generally has the right idea about banks and their risks, which are risks not just “to themselves” but to all of society and the global economy. Yet here Haldane’s endorsing the sort of sleight of hand that banks are all too ready to perform with no encouragement. Not a good sign

Meeting Bank Capital Requirements in Europe

There are a number of ways that European banks are moving to boost their Tier 1 capital and strengthen their balance sheets. Some are cutting dividends, diluting current share holders through new rights issues, laying off staff, and selling off assets

In defense of the SEC — no, really

The Finance Addict writes : “We need to put our cynic hats on and start questioning why it is that the SEC isn’t getting any. My guess–it’s no accident.”

Hard evidence: bailed out banks take more risk

Politicians, Treasury Secretaries, etc. would have you believe that “moral hazard” is something we should only worry about in the abstract, in the future, when they’ve moved on to another job. But now a study confirms with hard facts: moral hazard–it lives.

Researchers have asked for some time whether and how bailouts might affect banks’ risk-taking. Would they run wild, aware of the high likelihood of being bailed out again if they ran into trouble? Or would they ease off precisely because they’d now be assured of lower financing costs and long-term survival, and therefore would want to avoid doing anything that might cause regulators to take that valuable banking license away? More daring or more discipline

The World’s 29 Too Big To Fail Banks

Here is the list of so-called global systemically important financial institutions by country. Who’s missing in your view

Sheila Bair on European Regulatory Capture

Sheila Bair argues that Europe’s banks are undercapitalised due in large part to regulatory capture

How government is to blame for global financial crisis

"There are unintended consequences of free markets. It’s not capitalism that has been the problem, but irresponsible governments and politicians who have allowed the financial system to explode by permitting the build-up of ludicrous amounts of debt and leverage. "No one ever said that free markets could or would be self-regulating. That’s where people over