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Author: Arthur E. Wilmarth Jr
Publisher: Oxford University Press, USA
ISBN: 019026070X
Category : Banking law
Languages : en
Pages : 601
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Book Description
Banks were allowed to enter securities markets and become universal banks during two periods in the past century - the 1920s and the late 1990s. Both times the ensuing unsustainable booms led to destructive busts - the Great Depression of the early 1930s and the Global Financial Crisis of2007-09. Both times, universal banks made high-risk loans and packaged them into securities that were sold as safe investments to poorly-informed investors. Both times, governments were forced to arrange costly bailouts.Congress passed the Glass-Steagall Act of 1933 in response to the Great Depression. The Act broke up universal banks and established a decentralized financial system composed of three separate and independent sectors: banking, securities, and insurance. That system was stable and successful for overfour decades until the big-bank lobby persuaded regulators to open loopholes in Glass-Steagall during the 1980s and convinced Congress to repeal it in 1999.In Taming the Megabanks, Arthur Wilmarth, Jr. argues that we must separate banks from securities markets again to avoid another devastating financial crisis and ensure that our financial system serves Main Street business firms and consumers instead of Wall Street bankers and speculators. Wilmarth'scomprehensive and detailed analysis of the roles played by universal banks in the two worst financial catastrophes of the past century demonstrates that a new Glass-Steagall Act would make our financial system much more stable and less likely to produce boom-and-bust cycles. And giant universalbanks would no longer dominate our financial system or receive enormous subsidies.Congress did not adopt a new Glass-Steagall Act after the Global Financial Crisis. Instead, Congress passed the Dodd-Frank Act. Dodd-Frank's highly technical reforms tried to make banks safer but left the dangerous universal banking system in place. Universal banks continue to pose unacceptablerisks to financial stability and economic and social welfare. They exert far too much influence over our political and regulatory systems because of their immense size and their undeniable "too-big-to-fail" status.Taming the Megabanks forcefully makes the case for a a new Glass-Steagall Act to break up universal banks. A more decentralized and competitive system of independent banks and securities firms would not only provide better service to Main Street businesses and ordinary consumers but also bringstability to a volatile financial system.
Author: Arthur E. Wilmarth Jr
Publisher: Oxford University Press, USA
ISBN: 019026070X
Category : Banking law
Languages : en
Pages : 601
Get Book Here
Book Description
Banks were allowed to enter securities markets and become universal banks during two periods in the past century - the 1920s and the late 1990s. Both times the ensuing unsustainable booms led to destructive busts - the Great Depression of the early 1930s and the Global Financial Crisis of2007-09. Both times, universal banks made high-risk loans and packaged them into securities that were sold as safe investments to poorly-informed investors. Both times, governments were forced to arrange costly bailouts.Congress passed the Glass-Steagall Act of 1933 in response to the Great Depression. The Act broke up universal banks and established a decentralized financial system composed of three separate and independent sectors: banking, securities, and insurance. That system was stable and successful for overfour decades until the big-bank lobby persuaded regulators to open loopholes in Glass-Steagall during the 1980s and convinced Congress to repeal it in 1999.In Taming the Megabanks, Arthur Wilmarth, Jr. argues that we must separate banks from securities markets again to avoid another devastating financial crisis and ensure that our financial system serves Main Street business firms and consumers instead of Wall Street bankers and speculators. Wilmarth'scomprehensive and detailed analysis of the roles played by universal banks in the two worst financial catastrophes of the past century demonstrates that a new Glass-Steagall Act would make our financial system much more stable and less likely to produce boom-and-bust cycles. And giant universalbanks would no longer dominate our financial system or receive enormous subsidies.Congress did not adopt a new Glass-Steagall Act after the Global Financial Crisis. Instead, Congress passed the Dodd-Frank Act. Dodd-Frank's highly technical reforms tried to make banks safer but left the dangerous universal banking system in place. Universal banks continue to pose unacceptablerisks to financial stability and economic and social welfare. They exert far too much influence over our political and regulatory systems because of their immense size and their undeniable "too-big-to-fail" status.Taming the Megabanks forcefully makes the case for a a new Glass-Steagall Act to break up universal banks. A more decentralized and competitive system of independent banks and securities firms would not only provide better service to Main Street businesses and ordinary consumers but also bringstability to a volatile financial system.
Author: Arthur E. Wilmarth Jr
Publisher: Oxford University Press
ISBN: 0190260718
Category : Business & Economics
Languages : en
Pages : 256
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Book Description
Banks were allowed to enter securities markets and become universal banks during two periods in the past century - the 1920s and the late 1990s. Both times, universal banks made high-risk loans and packaged them into securities that were sold as safe investments to poorly-informed investors. Both times, universal banks promoted unsustainable booms that led to destructive busts - the Great Depression of the early 1930s and the Global Financial Crisis of 2007-09. Both times, governments were forced to arrange costly bailouts of universal banks. Congress passed the Glass-Steagall Act of 1933 in response to the Great Depression. The Act broke up universal banks and established a decentralized financial system composed of three separate and independent sectors: banking, securities, and insurance. That system was stable and successful for over four decades until the big-bank lobby persuaded regulators to open loopholes in Glass-Steagall during the 1980s and convinced Congress to repeal it in 1999. Congress did not adopt a new Glass-Steagall Act after the Global Financial Crisis. Instead, Congress passed the Dodd-Frank Act. Dodd-Frank's highly technical reforms tried to make banks safer but left in place a dangerous financial system dominated by universal banks. Universal banks continue to pose unacceptable risks to financial stability and economic and social welfare. They exert far too much influence over our political and regulatory systems because of their immense size and their undeniable "too-big-to-fail" status. In Taming the Megabanks, Arthur Wilmarth argues that we must again separate banks from securities markets to avoid another devastating financial crisis and ensure that our financial system serves Main Street business firms and consumers instead of Wall Street bankers and speculators. Wilmarth's comprehensive and detailed analysis demonstrates that a new Glass-Steagall Act would make our financial system much more stable and less likely to produce boom-and-bust cycles. Giant universal banks would no longer dominate our financial system or receive enormous subsidies. A more decentralized and competitive financial system would encourage banks and securities firms to fulfill their proper roles as servants - not masters - of Main Street businesses and consumers.
Author: Arthur E. Wilmarth
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This essay was published as part of a law review symposium that evaluated my work on theregulation of large, complex financial institutions. Part I of my essay discusses the other articlespublished in the symposium issue and describes their relationship to my own work. Part IIanalyzes the global financial crisis that began in March 2020, following the outbreak and rapidspread of the COVID-19 virus. Part II also reviews the extraordinary actions taken bygovernments and central banks in response to that crisis. Part II argues that the pandemic-induced financial crisis and its aftermath confirm two lessons we should have learned from theglobal financial crisis of 2007-09. First, “universal banks” (financial holding companies thatconduct a wide range of banking and capital markets activities) and “shadow banks” (largenonbank financial institutions that engage in bank-like activities) pose unacceptable risks to thestability of financial markets and economies around the globe.Second, the world remains trapped in a “global doom loop,” despite the financial reformsadopted by many countries after 2009. The “global doom loop” is a toxic web of mutualdependence that connects universal banks and shadow banks to governments and central banks.The “global doom loop” produces continually rising levels of private and public debts, which inturn promote dangerous boom-and-bust cycles. Those boom-and-bust cycles require ever-largerbailouts when significant financial or economic disruptions occur. In view of the massive debtburdens that many nations have assumed since 2007, it is highly doubtful whether theirgovernments and central banks could arrange similar rescues in the near future withouttriggering sovereign debt crises. Accordingly, the goal of “taming the megabanks” - of both “universal” and “shadow” varieties - must remain at the top of the agenda for financial regulators and policymakers. A new Glass-Steagall Act would provide the most direct and effective way to (1) greatly reduce the risks posed by universal and shadow banks and (2) end the destructive boom-and-bust cycles generated by the "global doom loop."
Author: Katarzyna Parchimowicz
Publisher: Taylor & Francis
ISBN: 1000799050
Category : Law
Languages : en
Pages : 246
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Book Description
Global systemically important banks (G-SIBs) are the largest, most complex and, in the event of their potential failure, most threatening banking institutions in the world. The Global Financial Crisis (GFC) was a turning point for G-SIBs, many of which contributed to the outbreak and severity of this downturn. The unfolding of the GFC also revealed flaws and omissions in the legal framework applying to financial entities. In the context of G-SIBs, it clearly demonstrated that the legal regimes, both in the USA and in the EU, grossly ignored the specific character of these institutions and their systemic importance, complexity, and individualism. As a result of this omission, these megabanks were long treated like any other smaller banking institutions. Since the GFC, legal systems have changed a lot on both sides of the Atlantic, and global and national lawmakers have adopted new rules applying specifically to G-SIBs to reduce their threat to financial stability. This book explores whether the G-SIB-specific regulatory frameworks are adequately tailored to their individualism in order to prevent them from exploiting overly general rules, as they did during the GFC. Analyzing the specific character and individualism of G-SIBs, in relation to their history, normal functioning, as well as their operations during the GFC, this book discusses transformation of banking systems and the challenges and opportunities G-SIBs face, such as Big Tech competitors, climate-related requirements, and the COVID-19 pandemic. Taking a multidisciplinary approach which combines financial aspects of operations of G- SIBs and legal analysis, the book describes G-SIB-oriented legal frameworks of the EU and the USA and assesses whether G-SIB individualism is adequately reflected, analyzing trends in supervisory action when it comes to discretion in the G-SIB context, all in order to contribute to the ongoing discussions about international banking law, its problems, and potential remedies to such persistent flaws.
Author: Pierre-Hugues Verdier
Publisher: Oxford University Press
ISBN: 0190675780
Category : Law
Languages : en
Pages : 304
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Book Description
In the years since the 2008 financial crisis, U.S. federal prosecutors have brought dozens of criminal cases against the world's most powerful banks, charging them with manipulating financial indices, helping their customers evade taxes, evading sanctions, and laundering money. To settle these cases, global banks like UBS, Barclays, HSBC and BNP Paribas paid tens of billions of dollars in fines. They also agreed to extensive reforms, hiring hundreds of compliance officers, spending billions on new systems, and installing independent monitors. In effect, they agreed to become worldwide enforcers of U.S. law, including financial sanctions-sometimes despite their own governments' protests. This book examines the U.S. enforcement campaign against global banks across four areas: benchmark manipulation, tax evasion, sanctions violations, and sovereign debt. It shows that U.S. prosecutors have unilaterally carved out a new role as global bank regulators, heralding a fundamental shift in how international finance is overseen. Their ability to do so stems from U.S. control over access to vital hubs of the international financial system. In some areas, unilateral U.S. actions have ushered in important multilateral reforms, such as the rise of automatic tax information exchange and better-regulated financial indices. In other areas, such as financial sanctions, unilateralism has attracted protests from other states and spurred attempts to challenge U.S. dominance of international finance.
Author: Jeff Connaughton
Publisher: Easton Studio Press, LLC
ISBN: 1935212974
Category : Political Science
Languages : en
Pages : 169
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Book Description
Lobbyist, White House Lawyer, and Senate Aide on the Power of America’s Plutocracy to Avoid Prosecution and Subvert Financial Reform Beginning in January 2009, THE PAYOFF lays bare Washington’s culture of power and plutocracy. It’s the story of the twenty-month struggle by Senator Ted Kaufman and Jeff Connaughton, his chief of staff, to hold Wall Street executives accountable for securities fraud, to stop stock manipulation by high-frequency traders, and to break up too-big-to-fail megabanks. This book takes us inside their dogged crusade against institutional inertia and industry influence as they encounter an outright reluctance by the Obama administration, the Justice Department, and the Securities and Exchange Commission to treat Wall Street crimes with the gravity they deserve. On financial reforms, Connaughton criticizes Democrats for relying on the very Wall Street technocrats who had failed to prevent the crisis and Republicans for staunchly opposing real reforms primarily to enjoy a golden opportunity to siphon fundraising dollars from the Wall Street executives who had raised millions to elect Barack Obama president. Connaughton, a former lawyer in the Clinton White House, illuminates the pivotal moments and key decisions in the fight for financial reform that have gone largely unreported. His arch, nonpartisan account chronicles the reasons why Wall Street’s worst offenses were left unpunished, and why it’s likely that the 2008 debacle will happen again.
Author: Audrey Kurth Cronin
Publisher: Oxford University Press
ISBN: 0190882166
Category : Political Science
Languages : en
Pages : 352
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Book Description
Never have so many possessed the means to be so lethal. The diffusion of modern technology (robotics, cyber weapons, 3-D printing, autonomous systems, and artificial intelligence) to ordinary people has given them access to weapons of mass violence previously monopolized by the state. In recent years, states have attempted to stem the flow of such weapons to individuals and non-state groups, but their efforts are failing. As Audrey Kurth Cronin explains in Power to the People, what we are seeing now is an exacerbation of an age-old trend. Over the centuries, the most surprising developments in warfare have occurred because of advances in technologies combined with changes in who can use them. Indeed, accessible innovations in destructive force have long driven new patterns of political violence. When Nobel invented dynamite and Kalashnikov designed the AK-47, each inadvertently spurred terrorist and insurgent movements that killed millions and upended the international system. That history illuminates our own situation, in which emerging technologies are altering society and redistributing power. The twenty-first century "sharing economy" has already disrupted every institution, including the armed forces. New "open" technologies are transforming access to the means of violence. Just as importantly, higher-order functions that previously had been exclusively under state military control - mass mobilization, force projection, and systems integration - are being harnessed by non-state actors. Cronin closes by focusing on how to respond so that we both preserve the benefits of emerging technologies yet reduce the risks. Power, in the form of lethal technology, is flowing to the people, but the same technologies that empower can imperil global security - unless we act strategically.
Author: Lee Tang
Publisher: LMT Press
ISBN: 1655697137
Category : Business & Economics
Languages : en
Pages : 86
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Book Description
How global finance is making us all poorer. This book is a summary of “The Finance Curse: How Global Finance Is Making Us All Poorer,” by Nicholas Shaxson. As a country’s financial sector develops, it improves the nation’s economic well-being and quality of life—but only up to a point. After that point, it reduces economic growth and inflicts much damage. We call this the finance curse. The United States, Britain, and many other Western economies passed this optimal point long ago. The 2008 Great Recession was part of the damage. As an economy becomes financialized, there is a massive growth in the financial, insurance, and real estate sectors, but not in the manufacturing and industrial sectors. Rather than creating wealth, the goal of finance becomes extracting value from the underlying economy. This way of thinking also becomes internalized into the economy, society, and culture, generating economic discrimination that underpins all discriminations—racial, gender, sexual, and geographical. This book documents the story of how finance got a stranglehold on society and reveals how we might release ourselves from its grasp. This guide includes: * Book Summary—helps you understand the key concepts. * Online Videos—cover the concepts in more depth. Value-added from this guide: * Save time * Understand key concepts * Expand your knowledge
Author: Juan Wang
Publisher: Oxford University Press
ISBN: 0190605731
Category : Political Science
Languages : en
Pages : 257
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Book Description
Based on original fieldwork, The Sinews of State Power seeks to understand continuous rural instability in China despite national reforms in the post-2000s. It offers a fresh perspective by revisiting the fundamental components of a capable government - a coherent and robust local leadership - and tracing its rise and demise since the Maoist era.
Author: Irvine H. Sprague
Publisher: Beard Books
ISBN: 9781587980176
Category : Business & Economics
Languages : en
Pages : 316
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Book Description
During the high interest times in the 1970's and 1980's, the banks and the savings and loan associations were under heavy financial pressure. Hundreds of them failed. The Home Loan Bank Board permitted the savings and loan associations to treat goodwill as capital, thereby allowing them to remain open and to build up enormous losses that eventually cost the taxpayers billions of dollars. The Federal Deposit Insurance Corporation took a different approach. It closed the banks or sold them, all at no cost to the taxpayers. Bailout is the engrossing story of how the FDIC handled four of these failures. Book jacket.
