Goldman Sachs Caught Prop Trading Again

By: Thursday January 10, 2013 5:48 am

Despite new regulations and outright promises from CEO Lloyd Blankfein, Goldman Sachs is once again engaging in proprietary trading. A practice that lead to a $550 million fine from the SEC when Goldman Sachs mislead clients in order to promote its own accounts. The solution under Dodd-Frank to this behavior was the Volker Rule but [...]

Today in Our Completely Captured Financial Regulatory Apparatus

By: Thursday November 29, 2012 11:40 am

Adding to the spate of delays on finalizing rules from the Dodd-Frank financial reform law, the final Volcker rule will probably not get finished until 2013. This is at least six months past due, as the original law called for a final Volcker rule in July. Five separate government agencies – the FDIC, the Federal [...]

Merkley, Levin Call Out Obstructionist Regulators Holding Up Volcker Rule

By: Thursday October 25, 2012 10:43 am

Almost four months after the deadline passed on finalizing the Volcker rule, the firewall on most types of proprietary trading set up between investment and commercial banks, the regulators tasked with writing the rule are no closer to a resolution. The Treasury Department last promised that the rule would get written by the end of [...]

Standard and Poor’s Report Strengthens Wall Street’s Hand in Fight Over Volcker Rule

By: Tuesday October 23, 2012 8:30 am

Standard and Poor’s estimates that the Volcker rule, due to be finalized at the end of the year, will eliminate $10 billion from bank profits annually. This is a sharp increase in the perception of the Volcker rule’s impact, and it comes before the extent of the rule is even known. “We currently estimate that [...]

Study: Time to Stop Banks from Risky Trading

By: Wednesday October 10, 2012 12:59 pm

Via Mark Gongloff, the IMF has released a new study showing that, in essence, the world would be a much safer place if international banks stopped trading in the financial markets. Why can’t banks just trade like George Soros and everybody else? Why can’t they have any fun? A few reasons: First, banks have tons [...]

Banks Want Another Account to Disguise Their Risky Trades

By: Wednesday August 29, 2012 12:58 pm

Whither the Volcker rule? After a flurry of discussion about it in the wake of JPMorgan Chase’s Fail Whale trades, we’ve heard significantly less of late. In fact, regulators blew through a July deadline on finalizing the Volcker rule. The last word we had was that the deadline was pushed back to the end of [...]

Adventures in Corporate PR: JPMorgan Chase About To Pull Off Fail Whale Bait and Switch

By: Wednesday July 11, 2012 8:55 am

Here’s a classic example of how corporations manage expectations. A couple weeks ago, on the same day as the Supreme Court ruling on the Affordable Care Act, the New York Times reported that JPMorgan Chase’s losses from the Fail Whale trades could reach as high as $9 billion. Their sources were “people who have been [...]

Dimon’s Testimony Has Implications for Volcker Rule Implementation

By: Wednesday June 13, 2012 1:25 pm

I certainly recognize that the so-called “grilling” of JPMorgan Chase CEO Jamie Dimon today was more like a pillow fight, with more Senators asking Dimon’s opinion on things than trying to get to the bottom of what happened at the Chief Investment Office. I don’t know what people expected. For all intents and purposes, members [...]

Reactions to Jamie Dimon’s Senate Banking Hearing: Admissions of Guilt Amid the Arrogance

By: Wednesday June 13, 2012 11:31 am

I don’t think it was too much of a surprise that today’s hearing with Jamie Dimon was something less than stringent. Very few Senators bothered to show up with anything more than a list of questions and a pallid expression. The very structure of the hearing, with one round of five minutes of questioning, wasn’t [...]

Banking Industry Risk Is Too Complex to Manage

By: Wednesday May 30, 2012 7:38 am

Joe Nocera admitted yesterday, building on previous opinion and research, that Dodd-Frank, the financial reform law, was essentially too complex to work. The crucial difference between the Glass-Steagall Act, the landmark banking reform law that was passed during the Great Depression, and Dodd-Frank, is that the former had an appealing simplicity that Dodd-Frank lacks. Glass-Steagall [...]

Investment Office At JPMorgan Chase Allowed to Chase Profits and Downplay Risk

By: Monday May 21, 2012 7:39 am

As more becomes known about JPMorgan Chase’s Fail Whale trade, we learn that the Chief Investment Office, where the trades were placed, was the most dysfunctional trading desk this side of AIG’s Financial Products Unit. Early success turned it from an office that was supposed to be hedging risk into a profit center. And this [...]

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