October 15, 2012
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This VOX post by one of the leading authors of this years Global Financial Stability Report Not making the grade: Report card on global financial reform | vox. argues that the pace of reform and restructuring of the financial sector is too slow. Important issues remain unresolved, including
- Financial systems are still overly complex.
- Banking assets are highly concentrated (Figure 3), with strong domestic interlinkages.
- The too-important-to-fail issues are unresolved.
- Banking systems are still over-reliant on wholesale funding (Figure 4)
There is still little progress (or politicla will?) to tackle the TBTF problem, and the financial system remain too complex. Shadow banking continue to be a problem, as well.
Key question is whether “traditional” program of reform, inkl. Basel 3, will deliver the required reforms in time? The lobbying pressure is intense, ref. the latest defeat of the SEC on money market reform. May be we need other approaches, ref. Haldane’s critique of Basel 3?
January 31, 2012
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This is a really interesting story about a guy who feels strongly that smaller banks are beautiful and is starting to invest on that basis. As Minsky noted long ago, Community Development Banks (eller spare banker på godt norsk) are good for the economy, not Too-Big-Too-Fail banks.