Skip to content


July 23, 2010

We have taken the first option (of several likelies) in the Seas Before saga .. and it occurs to me that someone ought say so before the weekend..

Storms and stormies being what they are of late your Narrator has been seconded to the Masters’ Forum on the Dodd-Franks Financial Reform Bill. (FRB) where a long and oft lively time has been had by all to date.

But first the good General Blurb hath asked to be mentioned like this: that when you are jumping over the copious puddles in kiwiland this past week it was me that you were being kind enough to avoid stepping on.. sort of saying how it feels right here and right now.. 🙂

Anyway, cheerful chappie that I am, here’s the pick of the Master’s on FRB..

After decades of deregulation, our [ US ] financial system has become unstable as players loaded up on leverage and untested innovations, leaving the system vulnerable to episodes of panics and deleveraging which can bring down the entire economy.

There are two complementary stories of leverage and systemic risk. The too big to fail story focuses on financial giants whose failure would rapidly spread to dozens of other connected firms. The shadow banking story focuses on the ways that markets like repo, commercial paper, and money market funds resemble banks, with short-term debts financing long-term assets, and hence become subject to runs.

Correctly, IMHO, Brett McDonnell goes on to argue that the subprime crisis with it housing bubble and securitzation fiasco was but a sideshow whose unraveling ignited and levelled the whole show.

Have as good (as weather and/or fortune allows) weekend..

Technorati Tags: , , , , , , , , , ,

No comments yet

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: