RSS feedmoral hazard
’A timely confirmation of risky behaviour
ECB papers are rarely the most riveting of reads but sometimes one crops up which is more attention-grabbing than usual…
This particular case, a paper by Biais, Heider and Hoerova, may be of interest as it at first glance appears to confirms what many already suspect — that hedging,
Is it cool to be a Sifi?
On Friday, the Financial Stability Board published the provisional list of global systemically important financial institutions (G-Sifis).
This had been widely trailed but we’re still wrestling with a tricky question:
No tail risk, please. I’m a bank
Spotted by the sharp-eyed creditplumber in a new paper from the Bank of England’s Paul Fisher:
And the footnote:
How many indeed.
Piling on the government gurantees
Government guarantees for financial institutions are a financial crisis thing, right?
Wrong.
As the above chart from a new OECD paper (by Sebastian Schich and Byoung Hwan Kim) shows, guarantees were proliferating well before the credit crunched years of 2007 to 2008.
Some intra-eurosystem inequality
The heart of Europe’s single currency union lies not in some grandiose parliamentary hall in Brussels, but in a little-known payment system platform with the unimpressive title of, “Target2″.
Just think of two eurozone banks.
CMBScurviness by originator
Iffy commercial loans pre-financial crisis? Blame the conduits.
A new Federal Reserve discussion paper takes a look at 30,000 loans that were eventually turned into Commercial Mortgage-Backed Securities (CMBS) to figure out whether mortgages originated by certain types of lenders were more risky.
Sneaky Citi, tricksy bailout
It’s November 21, 2008.
Lehman collapsed some nine weeks before and the US government is struggling to contain the fallout. They’ve started Tarp and injected funds into ailing financials, but it’s having little effect.
Going for broke with bank guarantees
Quelle surprise. Or should we say, was fur eine Überraschung?
A new working paper from the European Central Bank describes the augmenting effect of government guarantees on bank risk-taking. In a nutshell:
A history lesson from the FCIC
In addition to grilling Dick Fuld on Wednesday, the FCIC has also quietly released a preliminary staff report documenting the history of ‘Too Big To Fail’ bailouts in the US and their relevance to the latest crisis.
Why letting Lehman go did crush the financial markets
For some time now, the folks over at Clusterstock – notably John Carney – have led a challenge to a particularly virulent piece of received wisdom: that the failure of Lehman was necessarily an inflection point that took the severity of the financial crisis to a whole new level.