The world’s largest banks and investment firms should undergo quarterly stress tests to identify risks that could sink the financial system, according to a proposal by Stanford University finance professor Darrell Duffie .
Top researchers at the Stanford University Graduate School of Business are taking diametrically opposing views on the Volcker rule, one of the most important issues in financial reform. The sharp distinctions can be seen in their public comments to U.S. bank regulators writing the rule, the part of the Dodd-Frank law that restricts proprietary trading by very large banks.
A Stanford University professor and student are seeking to fix a flaw in credit-default swap contracts that threatens to leave buyers with only part of their losses covered from a sovereign debt restructuring.
New rules aimed at making the world safer from blowups in the $693 trillion derivatives market are poised to drive up costs so much for retirement funds and other users that bankers say they do just the opposite.
Aiming to stay a step ahead of “the next Madoff,” the Securities and Exchange Commission is set to hire University of Texas professor Henry Hu to oversee risk analysis and seek out market areas where abuses may emerge, Joshua Gallu, Jesse Westbrook and David Scheer report.
JPMorgan Chase & Co. and Bank of America Corp. are helping clients find an extra $2.6 trillion to back derivatives trades amid signs that a shortage of quality collateral will erode efforts to safeguard the financial system.
Credit markets, which inflicted more than $2 trillion of losses and writedowns on the world’s biggest financial institutions from 2007 through 2009, are now seen as the safest since before the financial crisis.