Category Archives: banking

Another Reason for Banks to be Small

Mike at Rortybomb finds some empirical research on what happens to loan rates when banks get bigger and more consolidated. The results make intuitive sense: as competition falls, loan rates go up. The exception is loans which can be securitized, … Continue reading

Posted in banking | 68 Comments

Why Healthy Banks Shouldn’t Repay TARP Funds

I got an interesting response from one reader to my post on whether healthy banks should be able to give back TARP funds. Here it is, with permission; the short version is basically "no". The TARP preferred shares were extended … Continue reading

Posted in bailouts, banking | 7 Comments

Why Big Banks Should be Smaller

James Kwak wants to make US financial institutions smaller: There are a few main things that made companies like AIG and Citigroup systematically important. One was interconnectedness: they did business with lots of counterparties. One was complexity: when push came … Continue reading

Posted in banking, regulation | 5 Comments

What they Used to Teach You at Stanford Business School

Chris Wyser-Pratte, who got his MBA from Stanford in 1972 and then spent the next 23 years as an investment banker, sent me the following note last night. I’m reprinting it here with his permission: I learned exactly seven things … Continue reading

Posted in banking, education, investing | 3 Comments

Millennium: A Stanford Copy-Cat

Adrienne Carter has found what looks very much to be the first — but surely not the last — of banks which won’t withstand much if any scrutiny in the wake of the Stanford collapse. Does any of this sound … Continue reading

Posted in banking, fraud | 2 Comments

Stanford vs Citi

Comment of the day comes from John Slater: You’ve had some interesting posts on Stanford. It appears that they have taken deposits to acquire trading/speculative assets. Not sure that what the big trading banks have done is all that different … Continue reading

Posted in banking | 3 Comments

America’s Insolvent Banks

John Hempton has 5,155 words on bank insolvency today, and makes the good point that "insolvency" is not well-defined. So what do I mean when I say that some big banks are insolvent? I mean that when you look at … Continue reading

Posted in bailouts, banking | 2 Comments

Are Uninsured Bank Depositors in Danger?

One of Dan Colarusso’s favorite bloggers, Hugo Lindgren, picks up on the latest weekly newsletter from Christopher Wood: It is even more amazing that Obama does not understand the political appeal of the nationalization option. Maybe the so-called liberal Democrats … Continue reading

Posted in banking | 51 Comments

Stanford Update

The Stanford Group story is finally, slowly, making its way into the mainstream media, with BusinessWeek and Bloomberg both reporting that the group is undergoing a new SEC investigation. BusinessWeek’s Matthew Goldstein also has the news that Charlesworth A.S. Hewlett, … Continue reading

Posted in banking, fraud | 1 Comment

Barack Obama for Treasury Secretary!

After Tim Geithner’s uninspired and uninspiring performance today, Barack Obama stepped up to show him how questions about nationalization should be answered: TERRY MORAN: There are a lot of economists who look at these banks and they say all that … Continue reading

Posted in bailouts, banking | 1 Comment