The wave of new banking regulations that Congress created to deter and punish Wall Street’s misdeeds is landing with much greater impact on the U.S.’s almost 7,000 community banks than on the too-big-to-fail lenders.
We have argued that if banks had much more equity, the financial system would be safer, healthier and less distorted. From society’s perspective, the benefits are large and the costs are hard to find; there are virtually no trade-offs.
In Hans Christian Andersen’s famous tale “The Emperor’s New Clothes,” two tailors offer to provide the emperor with beautiful and very special clothes. They claim the clothes will be invisible to people who are stupid or unfit for their jobs. The emperor orders a full set.
Oct. 25 (Bloomberg) -- Bloomberg View columnists Josh Barro and Ramesh Ponnuru participate in a panel discussion about the U.S. presidential election. Bloomberg's Paula Dwyer moderates at the Bloomberg Link Dealmakers Summit in New York. (All three participants are Bloomberg View columnists. The opinions expressed are their own. Source: Bloomberg)
It sounds harsh. The board of JPMorgan Chase & Co. said today it is cutting in half the 2012 pay of Chief Executive Officer Jamie Dimon, following a review of trading losses. The board found that Dimon bears ultimate responsibility for the fiasco, which took place in the bank's chief investment office and cost the company more than $6 billion.
The debate over choosing the next managing director of the International Monetary Fund is ostensibly about whether its succession process is transparent and merit-based. But this is code for a more important issue -– whether the time has come for Western Europe to give up control of the IMF. There is a valid economic case that the next chief should come not from Europe, as tradition dictates, but from one of the emerging markets. India, South Africa, China, Mexico and Brazil all have strong candidates.