Receiving Wide Coverage ...
#TwitterIPO: If economics is the allocation of scarce resources, what does it mean that the company had to devote 67 of 140 characters to the disclaimer, "This Tweet does not constitute an offer of any securities for sale"? Wall Street Journal, Financial Times, New York Times, Washington Post
A September to Remember: More crisis retrospectives as the five-year anniversary of the Lehman bankruptcy approaches...
"A Toxic Subprime Mortgage Bond's Legacy Lives On" Now here are some deep cuts. The Journal's reporters "tracked the mortgages in one subprime bond, and what happened to some of the families tied to it." It's a Countrywide securitization from 2006, servicing inherited by Bank of America.
"Lehman's legacy: Five bitter pills." In light of "concerns that new regulations amount to mere tinkering," the FT considers "radical proposals to strengthen the system," such as making banks hold double-digit equity just like "normal industrial companies," an idea advocated by Stanford University's Anati Admati. Note the inverse relationship between "merit of idea" and "likelihood of implementation."
"Insane financial system lives post-Lehman" Among other absurdities, according to FT columnist Gillian Tett, "The big banks are bigger not smaller. [T]he banking world, especially in the US, has become more concentrated than ever." For a dissenting view on that, see this recent BankThink post by Patrick Sims of Hamilton Place Strategies.
"This is a complete list of Wall Street CEOs prosecuted for their role in the financial crisis" You can guess the punch line, so skip to the last four paragraphs of this piece in the Post's Wonkblog for a refreshingly levelheaded analysis. And since this week is as good a time as any to revisit the why-haven't-any-bankers-gone-to-jail question, see BankThink contributor Richard Margan-Wells' sober take as well.
Lehman Lucre: Hedge funds that bought bankruptcy claims and lawyers and accountants administering the estate have profited handsomely from the investment bank's demise over the last five years. Wall Street Journal, Financial Times
More on That 'Tinkering': New York Fed President William Dudley is worried that global regulators are proceeding too slowly to harmonize and toughen regulation of derivatives. He and his 11 regional Fed bank counterparts all say the SEC proposal to tighten regulation of money market funds doesn't go far enough. Some legal scholars (including Sen. Elizabeth Warren) want to end an exemption for derivatives in the bankruptcy code that allowed Lehman's counterparties to seize their collateral within weeks of its collapse and led to protracted legal battles.
Wall Street Journal
"Embattled J.P. Morgan Bulks Up Oversight" The bank is making "a huge investment of people, time and money" in compliance and risk management, CEO Jamie Dimon tells the Journal. Unidentified "people close to the bank" provide hard numbers.
New York Times
"Fed Prepares for Change in Policy, and in Policy Makers" A roundup of the central bank's challenges as it gets ready to taper asset purchases and say goodbye to Bernanke.
"2 Consultants to Banking Industry Come Under Scrutiny." Promontory and PwC are the consultants (which, the article notes, are "known as Wall Street's shadow regulators" wonder where they heard that), New York regulator Benjamin Lawsky is the scrutinizer.