International Banker (December 18)
If Japan’s Financial Services Agency and the nation’s “asset-management industry work together to establish ‘customer-oriented business operations’, they may succeed in gaining the trust of retail investors, and the financial assets of Japanese households may finally show a visible shift from cash and deposits to securities.” Two decades of failed efforts starting with the Big Bang financial reform suggest “it will take much effort to gain the trust of retail investors, some of whom have experienced disappointing returns in the past. Unless the Japanese financial industry works harder than ever for customers’ interests, the goal of ‘savings to investments’ will turn out to be elusive once again.”
Tags: Asset-management industry, Big bang, Customer-oriented, Disappointing, Elusive, Failed, Financial assets, Financial Reform, FSA, Households, Investments, Japan, Retail investors, Securities, Trust
Wall Street Journal (May 7)
As its economy slows, China is taking “tentative steps toward crucial financial reform.” These steps may leave some firms without the comfortable support of the Government’s safety net. “A few bankruptcies and defaults in recent months suggest that the bailout culture may give way to creative destruction. The year ahead should show whether China has reached a reform turning point.”
Tags: Bailouts, Bankruptcies, China, Creative destruction, Default, Economy, Financial Reform, Government, Turning-point
Washington Post (April 29, 2013)
Despite the Dodd-Frank financial reforms, JPMorgan Chase, Bank of America, Citigroup and Wells Fargo remain too big to fail. “At $7.8 trillion, their combined assets are half the size of the entire U.S. economy, and they hold more than half of the nation’s $7 trillion in deposits.” It is unlikely that the U.S. government could ever allow any of them to fail.
Tags: Assets, Bank of America, Citigroup, Dodd-Frank, Economy, Financial Reform, JPMorgan Chase, Too big to fail, U.S., Wells Fargo
Wall Street Journal (March 5)
Many recent financial reforms are designed to prevent banks from becoming too big to fail. In fact, large banks and holding companies still enjoy “a lower cost of funds than banks in every other category.” The market still believes the banks are too big to fail. The Wall Street Journal believes there will be even more bailouts come the next crisis because, “Dodd-Frank is making the big banks bigger and more protected than ever against failure.”
Tags: Bailouts, Banks, Dodd-Frank, Financial Reform
The Economist (July 1)
Financial reform in the U.S. moved a step closer. The House of Representatives passed the 2,319-page Dodd-Frank Wall Street Reform and Consumer Protection Act. A vote in the Senate is expected later in July. Many are calling this legislation the biggest overhaul of the financial system since the 1930s. The Economist believes the act “does make progress,” though it “is an incomplete remedy.” That so much reform is nearly accomplished, however, shows the great motivation provided by the financial crisis.
Tags: Congress, Dodd-Frank Act, Financial Reform
The New York Times (June 23)
Financial reform is entering “a crucial phase” in Congress and derivatives trading must be addressed. The NYT blames derivatives for much of the economic crisis. Derivatives “fed the bubble, intensified the bust and led to the bailouts.” Congress should require derivatives be “traded on transparent exchanges and processed through third-party clearinghouses to guarantee payment in case of default.” This will help avoid another financial crisis.
Financial reform is entering “a crucial phase” in Congress. The Times believes derivatives trading must be addressed. The NYT blames derivatives for much of the economic crisis. Derivatives “fed the bubble, intensified the bust and led to the bailouts.” Congress should require derivatives be traded on transparent exchanges and processed through third-party clearinghouses to guarantee payment in case of default. This will help avoid another financial crisis.
Tags: Clearinghouse, Congress, Derivatives, Financial Reform
