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Tag >> Enron
Feb 24
2010

Goldman and Greece: So much for reputational risk

Posted by Ron F in Standard & Poor'sSecurities and Exchange CommissionRiskRegulationGoldman SachsFederal ReserveEnronBanksbanking reform

Ron F

Simon Johnson points out today that Goldman Sachs' contention that it has nothing to apologize for after helping Greece mask its debt for purposes of gaming the European Union's financial rules pokes a hole in yet another shibboleth about the virtues of unregulated finance. And that is the laughable notion that the fear of damage to one's reputation makes self-regulation work and government oversight unnecessary.

Sorry to toot my own horn here (and to link to this article of mine for the umpteenth time), but I made the same point several years ago when I discussed the doubts harbored about the efficacy of this reasoning by Richard Portes of the London Business School.

Feb 22
2010

How regulators helped banks emulate Enron

Posted by Ron F in RiskRegulationFederal ReserveFASBEnroncomplianceCitigroupBanksBankingAccounting

Ron F

One of the mysteries of the financial crisis is how it came to be that banks ended up with risk they supposedly transferred to investors.

Sure, it's well known that assets banks removed from their balance sheets did not shift much risk to investors after all, thanks to liquidity guarantees they supplied to investors. But that even took former Citigroup vice chairman and Treasury secretary Robert Rubin by surprise, as Rubin said he didn't know such guarantees existed until after the bank was forced to increase its capital reserves because it had to make good on them.

Feb 16
2010

Andrew Hall's conflict of interest looks much like Andy Fastow's

Posted by Ron F in TradingRegulationObama AdministrationEnronenergycomplianceCitigroupCFOBanksBanking

Ron F

Does anybody else have problems with the fact that the head of the energy trading unit that Citigroup sold to Occidental last year is setting up a hedge fund?

It would be an entirely different situation if Andrew Hall were leaving Occidental to do this, but he isn't. Instead, he will wear both hats simultaneously.

Feb 15
2010

Greek swaps just the latest securitization to go bad

Posted by Ron F in RegulationGoldman SachsGAAPfinancial crisisEnronderivativescredit-rating agenciesCredit RatingscomplianceBanksbanking reformBankingAccounting

Ron F

The securitization of Greek debt arranged by Goldman Sachs is hardly a new development in modern finance.

In fact, it looks a lot like some of the deals that Enron arranged with the help of investment banks, only the Greek currency swaps seem to have played the rules.

Feb 04
2010

GOP says health care should be run like Wall Street

Posted by Ron F in Securities and Exchange CommissionSarbanes-OxleyRiskRegulationreformPhil GrammPaul VolckerObama AdministrationObamahealth insurancehealth careGlass-SteagallGlass Steagall ActFederal ReserveFASBEnronCongresscomplianceBanksBanking

Ron F

My apologies to all the technocrats out there who want us to stick to corporate finance, narrowly defined. But the Republican counter-proposal to Obama's budget is just too ridiculous to pass up in at least one major respect.

As James Kwak points out today, the party recommends that we reform health care the same way we did Wall Street after the Crash of 1929, with an emphasis on more disclosure so consumers can make better informed choices.

Jan 22
2010

Glass-Steagall stirs in its grave

Posted by kcates in Wendy Lee GrammVolcker RuleSteve TaubRon FinkPhil GrammPaul VolckerObamaKarl CatesJPMorgan Asset ManagementGoldman Sachs Asset ManagementGlass-SteagallEnron

kcates
 

The "change" president, finally, might actually change something.

"It's a fight I'm ready to have," Barack Obama says on TV in taking a stand against the decade-old racket that lets commercial banks take customer money and go a-gaming with it. This of course is the politically astute thing to say in these troubled times. But the White House stagecraft this week adds gravitas to the rhetoric by bringing Paul Volcker in from the cold and standing him up in Obama's corner. Volcker's the guy who's been going around shouting into the wilderness that Glass-Steagall must be revived. Suddenly, the idea has wind in its sails.

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