iOS app Android app

Entries by Simon Johnson

Remember Citigroup

(93) Comments | Posted July 15, 2013 | 9:39 AM

On Thursday of last week, four senators unveiled the 21st Century Glass-Steagall Act. The pushback from people representing the megabanks was immediate but also completely lame -- the weakness of their arguments against the proposed legislation is a major reason to think that this reform idea will ultimately...

Read Post

Goldman Sachs Concedes Existence of Too Big to Fail

(234) Comments | Posted June 17, 2013 | 10:47 AM

Global megabanks and their friends are pushing back hard against the idea that additional reforms are needed - beyond what is supposed to be implemented as part of the Dodd-Frank 2010 financial legislation. The latest salvo comes from Goldman Sachs which, in a recent report, "Measuring the TBTF effect...

Read Post

Simon Johnson Explains The Case For Megabanks Fails

(5) Comments | Posted May 2, 2013 | 11:04 AM

The megabank lobby has finally put its best arguments on the table. After years of silly Twitter posts, weak research papers and other forms of unimpressive public relations, those opposed to further financial reform now have serious representation in the debate about what to do regarding too-big-to-fail banks.

Read Post

Sir John Peace Should Resign As Chairman of Standard Chartered Bank

(54) Comments | Posted March 21, 2013 | 11:51 PM

On Thursday, March 21, Sir John Peace conceded that he lied to investors on March 5, 2013 when he said of Standard Chartered Bank,

"We had no willful act to avoid sanctions; you know, mistakes are made - clerical errors - and we talked about last year a number of...
Read Post

"Some of These Institutions Have Become Too Large"

(233) Comments | Posted March 7, 2013 | 7:42 AM

In a recent interview with PBS's Frontline, Lanny Breuer, head of the criminal division at the Department of Justice, appeared to admit that some financial institutions were too big to prosecute. In the "too big to fail is too big to jail" controversy that ensued, lobbyists and other supporters...

Read Post

Scott Brown: ATM for the Big Banks

(47) Comments | Posted September 30, 2012 | 10:02 AM

During the Dodd-Frank financial reform debate in early 2010, newly elected Senator Scott Brown of Massachusetts was referred to as an ATM for the bankers -- meaning that whenever they needed some more cash, they would stop by his office. It was not paper money he was handing out, of...

Read Post

One Man Against The Wall Street Lobby

(159) Comments | Posted August 25, 2012 | 6:15 PM

Two diametrically opposed views of Wall Street and the dangers posed by global megabanks came more clearly into focus last week. On the one hand, William B. Harrison, Jr. -- former chairman of JP Morgan Chase -- argued in the New York Times that today's massive banks are an...

Read Post

Simon Johnson: Banks' Living Wills Aren't Cure For Systemic Risk

(3) Comments | Posted July 9, 2012 | 12:15 PM

Bloomberg View

On July 3, the Federal Deposit Insurance Corp. and the Federal Reserve made public portions of the “living wills” developed recently by major U.S. financial institutions. The documents are the first suggestions from those organizations of what they believe should happen when insolvency looms.

Read Post

La fin de l'euro approche: Guide de survie

(23) Comments | Posted May 28, 2012 | 11:18 AM

Chaque crise économique débouche sur une prise de conscience collective. En Europe, ce moment approche. Des millions de personnes devront bientôt faire face au chaos et admettre que l'euro, tel que nous l'avons connu, est chose du passé.

Pour comprendre le pourquoi de cette situation, il faut avant tout perdre...

Read Post

The End of the Euro: A Survivor's Guide

(1161) Comments | Posted May 27, 2012 | 5:56 PM

In every economic crisis there comes a moment of clarity. In Europe soon, millions of people will wake up to realize that the euro-as-we-know-it is gone. Economic chaos awaits them.

To understand why, first strip away your illusions. Europe's crisis to date is a series of supposedly "decisive" turning points...

Read Post

Jamie Dimon Should Resign From the Board Of The New York Fed

(85) Comments | Posted May 21, 2012 | 8:04 AM

Jamie Dimon, CEO of JP Morgan Chase, is a member of the board of the New York Federal Reserve Bank. Mr. Dimon's role there is sometimes presented as "advisory" but he sits on the Management and Budget Committee; here is the committee's charter, which includes reviewing and endorsing...

Read Post

Geithner to Dimon: Resign From the Board of the New York Fed

(205) Comments | Posted May 17, 2012 | 10:27 PM

In an interview Thursday on PBS NewsHour, Jeffrey Brown and Treasury Secretary Tim Geithner had the following exchange:

"JEFFREY BROWN: Do you think Jamie Dimon should be off the board [of the New York Federal Reserve Board]?

TIMOTHY GEITHNER: Well, that's a question he'll have to make and the...

Read Post

JP Morgan Debacle Reveals Fatal Flaw In Federal Reserve Thinking

(678) Comments | Posted May 11, 2012 | 8:22 AM

Experienced Wall Street executives and traders concede, in private, that Bank of America is not well run and that Citigroup has long been a recipe for disaster. But they always insist that attempts to re-regulate Wall Street are misguided because risk-management has become more sophisticated -- everyone, in this view,...

Read Post

Fiscal Affairs: The Buffett Rule Is a Good Idea

(193) Comments | Posted April 16, 2012 | 9:23 AM

Some high income Americans pay a lot of tax; others do not. If you have right tax advice and if most of your income can be structured as some form of "capital gains," your marginal rate -- what you pay on the your last dollar of income -- may be...

Read Post

Jim Yong Kim for the World Bank

(11) Comments | Posted April 15, 2012 | 11:15 AM

A decision on choosing the next president of the World Bank is expected this week -- perhaps as early as Monday. The Obama administration nominated Jim Yong Kim, president of Dartmouth College and a noted public health expert. The reaction to this nomination from development economists and people experienced in...

Read Post

Volcker Rule Would Cause Irreparable Damage to the Muppets -- and Much More Broadly

(39) Comments | Posted April 1, 2012 | 1:00 PM

A major new research report -- released this weekend by the renowned international consulting firm, IMS -- finds conclusively that implementation of the proposed Volcker Rule would damage not just the irreplaceable Muppets but also "all children-oriented television or other media-based educational program content."

The logic in the...

Read Post

Fiscal Affairs: Last Ditch Attempt to Save a Little Bit of Investor Protection in the U.S.

(28) Comments | Posted March 22, 2012 | 8:35 AM

As it currently stands, the "JOBS" bill now before the Senate would gut investor protection in the United States. The title of the bill is a complete misnomer -- anything that weakens investor protection makes it more risky to invest in companies and increases the cost of capital to honest...

Read Post

Fiscal Affairs: "JOBS" Disaster Looms

(109) Comments | Posted March 21, 2012 | 10:18 AM

The House "JOBS" bill is a thinly disguised repeal of investor protection in the United States. This legislation would help unscrupulous people in the securities industry, but it would be bad for nonfinancial businesses -- by raising the risks to investors, it would push up the cost of capital for...

Read Post

Fiscal Affairs: CFA Institute Against the "JOBS" Bill

(38) Comments | Posted March 20, 2012 | 8:44 AM

The Senate is due to vote today on the so-called "JOBS" bill -- a piece of legislation, originating in the House, which aims to reduce disclosure and other securities law protections for investors (see my review yesterday; a link to HR3606 is here).

Supporters of the...

Read Post

Fiscal Affairs: A Colossal Mistake of Historic Proportions: The "JOBS" Bill

(446) Comments | Posted March 19, 2012 | 8:22 AM

From the 1970s until recently, Congress allowed and encouraged a great deal of financial market deregulation -- allowing big banks to become larger, to expand their scope, and to take on more risks. This legislative agenda was largely bipartisan, up to and including the effective repeal of the Glass-Steagall Act...

Read Post