Commentary

Monday, April 24, 2017

No Regulatory Relief for Securities Finance

Financial CHOICE Act leaves constraints intact

The latest legislative offering in the U.S., the Financial CHOICE Act, does nothing for securities finance. Nothing in the bill provides an exemption to the funding markets from the crushing weight of regulatory reform. At present, both political parties in the US seem willing to accept an outcome where the global funding markets are road kill from the reform steamroller. Many experts believe this legislative failure is due to analytic omissions on the...

Wednesday, April 12, 2017

All the Bonds in Christendom

Part I: The Relationship Factor

The 180th anniversary of J.P. Morgan’s birth will fall on Monday, April 17th, 2017. The great financier died aged 76, a few months after testifying before the U.S. Congress in the Money Trust hearings. By all accounts, Morgan shocked the national media when he said that a strong relationship was more important than collateral when extending bank credit. Risk management, to Morgan, was personal, concise and pithy:

Sunday, February 26, 2017

The Overlooked Merits of Bank Disclosure

What if banks were to get a capital benefit from investing in superior risk management technology – and if that benefit was disclosed to the market? Should not the costs of risk management investments by FDIC-insured banks be partly repaid by taxpayers in the form of capital relief? Why don’t capital rules allow a reduction in risk-weighted requirements, to help offset the lost revenue and encourage conservative risk management? Dynamic metrics are far more relevant for...

Sunday, February 12, 2017

For the Want of a Nail … the Details of Regulatory Reform

UNANTICIPATED COSTS - AND BENEFITS

To look for the effect of new rules on banks, regulators rely on academic models that treat banks as aggregates. In truth, global banks are collections of service businesses, not simply larger versions of George Bailey’s 1946 community lender. Missing that fact may be one reason why the list of unintended consequences from regulatory reform is growing. Critics in the U.S., without anticipating a challenge, are calling for the repeal of the Dodd-Frank Act. But expecting repeal is a...

Wednesday, November 30, 2016

Enlightened, not Reactive Regulation: Now It Starts

Since passage of the Dodd-Frank Act in 2010, the financial industry has been dealing with an almost unstoppable wave of regulatory reforms. Most, if not all have been designed to prevent a repetition of the problems that followed the failure of AIG and Lehman Brothers in 2008. Now, after the U.S. election of a conservative majority in two (and soon to be all three) branches of the U.S. federal government, many bankers feel that a huge regulatory weight is about to be lifted. Some bankers...
RSS

Journal Commentaries

 

Keep Regulation Functional (October 2008)

CSFME’s Executive Director Ed Blount interviews SEC Chairman Chris Cox.
American Banking Association Banking Journal
https://www.questia.com/library/journal/1G1-187494664/keep-functional-regulation-how-financial-regulation

 

The Bear Market Posse, or Counterparty Risk Management during the Recent Turmoil (Sept.  2008)

by Ed Blount
The RMA Journal, v91n1, 28-32, 5 pages Sep 2008.

 

Searching for New Paradigms at BIS (July 2008)

by Ed Blount
Unexpected deficiencies in bank capital after recent market turmoil has regulators rethinking aspects of Basel II and “value at risk.”  
American Banking Association Banking Journal  
https://www.questia.com/library/journal/1G1-181991450/searching-for-new-paradigms-at-bis-market-turmoil

 

Will Basel II Affect The Competitive Landscape? (September 2003)

By Ed Blount
Newly elected Basel Committee Chairman Caruana, Governor of the Bank of Spain, gives his views on the revised Basel capital accord, relative to its potential effects on competition and risk management in banking markets.
American Banking Association Banking Journal
https://www.questia.com/read/1G1-108008773/will-basel-ii-affect-the-competitive-landscape-the​