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Browsing Category
Monetary System
Reserves, Governement Bond Sales, and Savings
Last week we showed that government deficits lead to an equivalent amount of nongovernment savings. The nongovernment savings created will be held in claims on government. Normally, the nongovernment sector prefers to hold that much of that…
How government is to blame for global financial crisis
"There are unintended consequences of free markets. It's not capitalism that has been the problem, but irresponsible governments and politicians who have allowed the financial system to explode by permitting the build-up of ludicrous…
How not to resolve a banking crisis
Much of macroeconomic policymaking is trial and error. This column discusses calamitous error on the part of Iceland’s policymakers, in the hope that others can at least try something else.
Dexia is seeking a new brand name
Belgian newspaper De Standarad reports that the folks at twice bailed out Franco-Belgian bank Dexia are looking for a new name for the company. Apparently, the Dexia brand has been tarnished.
Dexia is Belgium’s version of NCNB, now Bank…
The two-step process of saving
Recipients of government spending can hold receipts in the form of a bank deposit, can withdraw cash, or can use the deposit to spend on goods, services, or assets. In the first case, no further portfolio effects occur. In the second case,…
Full Text: Moody’s downgrades five Spanish banks following Spain’s downgrade to A1
"Moody's Investors Service has today downgraded the long-term senior debt and deposit ratings of five Spanish banks by one notch. These rating actions follow yesterday's downgrade of the Kingdom of Spain's government bond rating to A1 from…
Bank of America’s Death Rattle: Not with a Bang, but a Whimper
Bob Ivry, Hugh Son and Christine Harper have written an article that needs to be read by everyone interested in the financial crisis. The article (available here) is entitled: BofA Said to Split Regulators Over Moving Merrill Derivatives…
A year later everyone is catching on about Fed policy and net interest margins
Last November, in anticipation of QE2, I wrote a post called “How Quantitative Easing and Permanent Zero are Toxic To Bank Net Interest Margins”. The gist of the post was that if the ‘extended period’ for low rates was too long, net…
Two Billion Dollars Lost because the FDIC Ignored United Commercial Bank’s Frauds
The good news is that we finally have the second group of indictments of senior bank officers. The prosecution involves officers of United Commercial Bank (UCB), a roughly $10 billion San Francisco bank that originally specialized in…
Bank Fee Revolt
November 5th is the date of the planned action. CNBC video below