It has been noted repeatedly that almost no top bankers have faced serious consequences for their actions in the financial crisis. But there is a Wall Street corollary that might be even more pernicious: good guys are punished.
After the worst crisis since the Great Depression, President Obama has unleashed an unusual force to regulate the financial system: a bunch of empty seats.
The most notable thing about the first-ever news conference of the Federal Reserve chairman, Ben S. Bernanke, last week was what wasn't discussed: banking regulation.
A former Moody’s analyst describes how the ratings agency’s culture has remained the same, despite pledges to operate differently after the financial meltdown.
The United States and Britain are two countries separated by a common financial crisis.
Since the crisis, Anat Admati and her colleagues have been arguing for higher bank capital standards to make the financial system safer. In this country, Professor Admati, who teaches economics and finance at the Stanford business school, has been a voice in the wilderness. In London, she finds a more receptive audience. "The U.S. is so much friendlier to the banks than the U.K.," she says. "You just try to get a word in -- well, the level of the debate is not the same."
Under terms being negotiated with state attorneys general, banks would be allowed to treat second liens like first mortgages -- and to avoid coming clean on the true extent of their losses.
Later this month, the Federal Reserve is going to let banks know how they did on its most recent round of “stress tests.”
Now for a bit of good news: Rationality may be breaking out in the hedge fund world.
Investors are punishing funds that have engaged in questionable behavior and balking at ever-escalating fees. Regulators are showing uncharacteristic backbone, insisting that they will not merely fight the last war when it comes to new rules.
About The Trade
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