Monthly Archives: April 2011

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Repo fraud “happens all the time,” says convicted Farkas

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Securitized banking has its first 21st Century big-time crook. Lee B. Farkas, chairman of one of the largest privately owned mortgage lending companies in the U.S. when it collapsed in 2009, was convicted by a jury April 19 of a … Continue reading

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Thoma: “Critical vulnerabilities remain”

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Get ready for the next financial crisis, cautions University of Oregon economist Mark Thoma in his April 23 blog Economist’s View. That’s because we have not taken, and are not likely to take, the needed steps to prevent runs on … Continue reading

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How will the FDIC unwind repos?

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The Dodd-Frank Act gave the FDIC the job of resolving systemically important financial institutions when they are in financial trouble.  How will the FDIC handle that company’s repos? An FDIC report April 18 gives the answer. It will sell them … Continue reading

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Will ‘ring-fencing’ work better than ‘firewalls’ did?

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We’re hearing a lot about “ring-fencing” these days. That sounds suspiciously like “firewalls” to some of us who covered the S&L calamity 20 years ago. Sheila Bair, chairman of the Federal Deposit Insurance Corp., thinks bank holding companies should ring-fence their investment banking operations … Continue reading

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Russia conducts first survey of its repo market

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The Russian Repo Council conducted it first biannual survey of the Russian repo market December 1, 2009, to May 31, 2010. The survey was designed with the help of the European Repo Council, which has conducted biannual repo surveys since … Continue reading

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Economists: Finance needs to be measured in new ways

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A new paper by three economists shows how far finance has come from the days when banks took in deposits and used the money to make loans. Today that same bank might augment those deposits by borrowing on the repo market … Continue reading

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An idea for enforcing ‘skin in the game’

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Joining the growing chorus of economists who are calling for financial institutions to finance themselves with more equity and less debt, a new study recommends two levels of capital. To the core capital requirements already applied to banks today, the … Continue reading