20 Feb The Impossibility of Capital Regulation

I've thought about this a lot. The more I contemplate the challenges of implementing a fair and effective system of capital regulation for credit risk, the more I appreciate its impossibility. First, a fair and effective system of capital regulation for credit risk involves the measurement...

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02 Feb China Understands The Limits Of Financial Engineering

When China published “Some Measures to Expand China’s Openness and Aggressively Utilize Foreign Investment Capital,” a lightbulb went on in my head: China finally “gets” the limits of financial engineering and will return to first principles. Deng Xiaoping is still the name most closely associated with...

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31 Jan Open For Foreign Business: China’s New OpenDoor Policy

On January 17, 2017, the same day China’s President, Xi Jinping, defended globalization at the World Economic Forum in Davos, its Premier, Li Keqiang, signed China’s action plan to make the world’s secondlargest economy a force, in a littlenoticed Notice issued by the State Council. Call...

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17 Jan What Moody’s Settlement Means

First, it will cost Moody's $864 MM plus other settlement-related expenses. The civil penalties are $437.5 MM, and $426.5 MM will go to the states that joined the Department of Justice, of which (so far) $12.7 MM goes to Indiana, $6.7 MM to Delaware, $19.4 MM...

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12 Jan Housing Rules Too Burdensome? Here’s A Real Fix.

Ben Carson, in testimony for his Senate confirmation Thursday, said onerous housing rules caused inequality because "the wealthy have their pick of loans" while "those without credit are locked out." Where have we heard this before? In 2002, George Bush said, "We can put light where there's...

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06 Nov Cash Is Not The Answer To Financial System Stability

There are a lot of theories being floated on how to effect financial system stability. Most involve separating money from finance. Reverence for money or cash is evident in the Chicago School of economics and neoliberalism, where value theory is based on price. It also underlies theories that equate banks...

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