What Happened To The Global Economy And What We Can Do About It “A Healthy Financial System Cannot Be Built On The Expectation Of Bailouts”

[dothemaths]

Simon Johnson. Testimony submitted to the Congressional Oversight Panel, "Hearing on the TARP's Impact on Financial Stability,

http://baselinescena...on-of-bailouts/

On a related topic - good riddance to HSBC - they'll be back when the next crisis hits.

I doubt the government in Beijing is going to bailout a non-communist bank.

Adjustments to our regulatory framework, including the Dodd-Frank financial reform legislation, have not fixed the core problems that brought us to bring of complete catastrophe in fall 2008. Powerful people at the heart of our financial system still have the incentive and ability to take on large amounts of reckless risk – through borrowing large amounts relative to their equity. When things go well, a few CEOs and a small number of others get huge upside. When things go badly, society, ordinary citizens, and taxpayers get the downside. This is a classic recipe for financial instability.

Regulation remains weak and many regulators are still captured by the ideology that big banks are good for the rest of the economy. Capital requirements will increase but are likely to remain below the level that Lehman had in the days before it failed (11.6 percent tier one capital). There will be no effective cap on the size of our biggest banks. They have an incentive to take on a great deal of leverage. This confers private benefits but great social costs – lowering economic growth, increasingly volatility, and making severe crises more likely.

[Bloo Loo]

whats all this nonsense "building a healthy financial system".?

no-one is building anything.

its been built, extended, they've changed the foundations by turning the pyramid upside down, in an earthquake zone, propped up by wooden timbers with woodworm.

[Injin]

whats all this nonsense "building a healthy financial system".?

no-one is building anything.

its been built, extended, they've changed the foundations by turning the pyramid upside down, in an earthquake zone, propped up by wooden timbers with woodworm.

Guy is from the IMF.

Enough said.

[mdman]

Guy is from the IMF.

Enough said.

He's also the chap that wrote about the coup that took place in America and how it mirrors banana republics

http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/

Illuminating stuff

[Injin]

He's also the chap that wrote about the coup that took place in America and how it mirrors banana republics

http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/

Illuminating stuff

Yes, it's terrible that what he did to tens of millions of poor souls is now being done near where he lives.

******nugget.