• Workin' hard-ish to prevent another one of these.


    Regulators May Finally Get Around To Dealing With The Things That Almost Destroyed The World Economy A Few Years Back

    We all know that no one listens to what credit ratings agencies say, and that if you were buying up all of that RMBS eight years ago marveling at what a great deal you were getting on triple-A rated stuff, you had it coming. But wouldn’t it be neat if you could put the tiniest […]

    / Aug 15, 2014 at 1:01 PM
  • Banks

    Jamie Dimon Has Only Begun To Fight

    The JPMC chief really means it this time: This far and no further!

    / Nov 21, 2013 at 4:07 PM
  • What? Can *YOU* name the current head - sorry, Acting Chairman - of the FDIC? No Googling.


    Some Banks Hoping To Be Too Small To Fail

    I feel like if I were the Financial Services Roundtable and I wanted to send a letter to Congress telling them to get rid of a rule that gives lashings of government support to little banks at the arguable expense of, um, this cast of ne’er-do-wells, I would do it anonymously. Or, like, I’d try […]

    / Nov 30, 2012 at 5:29 PM
  • Help me pick a color scheme for these charts in Google. I miss gStyle.


    Sheila Bair Still Feels Bad That JPMorgan Was Forced To Take Cheap Capital To Help Out Citi

    Being in certain rooms at certain times seems to be a good predictor of selling a book. Bin Laden’s bedroom on the night of his death is an obvious one, and various days in the Oval Office have or may soon have their chroniclers, though the world still awaits the unabridged memoirs of the guy […]

    / Sep 20, 2012 at 4:42 PM
  • I did a search for "sarcastic clap" and this came up, it's just a coincidence that it's Dimon.

    Banks, News

    Banks Prove That They Are Not Too Big To Fail By Saying “We Can Fail” On A Piece Of Paper, Moving On

    One way you could spend this slow week is reading the “living wills” submitted by a bunch of banks telling regulators how to wind them up if they go under. Don’t, though: they’re about the most boring and least informative things imaginable and I am angry that I read them.* Here for instance is how JPMorgan would wind itself up if left to its own devices**:

    (1) It would just file for bankruptcy and stiff its non-deposit creditors (at the holding company and then, if necessary, at the bank).

    (2) If after stiffing its non-deposit creditors it didn’t have enough money to pay its depositors it would sell its highly attractive businesses in a competitive sale to willing buyers who would pay top dollar.

    This seems wrong, no? And not just in the sense of “in my opinion that would be sort of difficult, what with people freaking out about JPMorgan going bankrupt and its highly attractive businesses having landing it in, um, bankruptcy.” It’s wrong in the sense that it’s the opposite of having a plan for dealing with banks being “too big to fail”: it’s premised on an assumption that the bank is not too big to fail. If JPMorgan runs into trouble that it can’t get out of without taxpayer support, it’ll just file for bankruptcy like anybody else. Depositors will be repaid (if they’re under FDIC limits); non-depositor creditors will be screwed just like they would be on a failure of Second Community Bank of Kenosha.

    / Jul 5, 2012 at 10:40 AM
  • Sheila Bair

    Banks, News

    Sheila Bair’s Cruelty To Banks Included Trying To Get Them To Hang On To $33bn They Didn’t Want

    There are so many good stories in Jesse Eisinger’s piece in ProPublica about how the Fed let banks return capital to shareholders that they somewhat obscure the central non-story: In early November 2010, as the Federal Reserve began to weigh whether the nation’s biggest financial firms were healthy enough to return money to their shareholders, […]

    / Mar 2, 2012 at 2:40 PM
  • Banks, News

    But What Would We Do For Entertainment If Banks Were Boring?

    Here is a standard set of moves in talking about bank riskiness: 1. Banks take too many bad risks! 2. Regulators should only let them take good risks! 3. All better now! There is, like, a problem there, because actually bankers tend to have compensation structures that are more directly tied to their success, and […]

    / Jan 4, 2012 at 4:19 PM
  • News

    Sheila Bair Doesn’t Know What The Volcker Rule Prohibits

    Sheila Bair, former head of the FDIC and cartoon-klutz-villain of Too Big to Fail, comes in for the occasional gentle ribbing on Wall Street, and her column in Fortune today is well set up for another round of gentle ribbing, which I will get to in just a minute, so you might think that that […]

    / Dec 9, 2011 at 2:35 PM
  • Banks, News

    Soon You’ll Be Able To Go To The FDIC Website And See If Uncle Jamie Left You Anything In His Will

    The term “living will,” applied to liquidation plans for big banks, has always seemed like a bit of a euphemism. After all, it really means “instructions on how to divide up our stuff when we die.” So, y’know, more of a regular will: The Federal Deposit Insurance Corp. board voted unanimously today to release a […]

    / Sep 13, 2011 at 12:55 PM
  • News

    Sheila Bair Not Intimidated By Threats of Financial Meltdown, Awkward Physical Contact

    Sheila Bair continues to be mad that she didn’t get to sit at the grown-ups’ table during the financial crisis, and she told Joe Nocera all about it in his much-talked-about “exit interview” this weekend. She-Bair is not afraid to bring the awkies regarding her relationship with Hank Paulson: “Except for a 10-second handshake, she […]

    / Jul 11, 2011 at 5:39 PM
  • News

    Who Wants To Be Chair(wo)man Of The FDIC?

    If you’re looking for a new gig and think it might be the right fit, put in an application today, as Sheila Bair will be stepping down July 8, after her term expires.

    / May 9, 2011 at 3:07 PM
  • News

    The FDIC Wants $900 Million From Former WaMu Exes, Their Wives

    As you may have heard, the FDIC has sued three former Washington Mutual execs, including CEO Kerry Killinger, COO Stephen Rotella, and home loans president David Schneider, whose “extreme and historically unprecedented risks with WaMu’s held-for-investment home loans portfolio” resulted in the bank’s collapse (according to filing, the bank’s chief risk officer told Killinger WaMu’s […]

    / Mar 18, 2011 at 11:47 AM
  • News

    Bonus Watch ’11: FDIC Votes To Make Bonus Payouts Multi-Year Event

    Why do it in one year when you can do three?

    / Feb 7, 2011 at 5:40 PM
  • News

    What the Hell is a Bank Doing With Mini-Japanese Sculptures?

    When a community bank gets seized by the FDIC, you expect its non-deposit assets to include some computers, office chairs, bank vaults, free lollipops, stress balls, stuff like that. But Bank of Lincolnwood, a Chicago-area community bank that was shut down last year, has some peculiar, and expensive, collectibles in its coffers.

    / Apr 28, 2010 at 1:00 PM
  • News

    Sheila Bair is One Tough Cookie

    Emails between the Office of Thrift Supervision and the FDIC over the issue of who can do what with regards to Washington Mutual in 2008 are particularly fierce. Carl Levin, chairman of the subcommittee investigating the collapse of WaMu, called it a “turf battle.” At the Senate hearing today, John Reich, former director of OTS, […]

    / Apr 16, 2010 at 1:24 PM
  • Banks, News

    Remember To Recycle (The Old Banks)

    What is one supposed to do with all the failed banks? Buy them and create a new, prettier one! Former BofA and Wachovia execs are doing just this and are seeking $1 billion to fund their mega-bank, the Blue Ridge Bank N.A., to be based in Charlotte. And they’re hiring!

    / Feb 12, 2010 at 2:25 PM
  • News

    WSJ: Selling 95% Of Failed Banks A Total Screw-Up

    Two regional bank CEOs say they can’t find a failed bank they want to buy. The Wall Street Journal runs a story that makes it seem like the Federal Deposit Insurance Corp. is going to be stuck with “a growing pile of terminally ill U.S. banks.” Well, that’s not exactly true: One of the banks […]

    / Nov 30, 2009 at 11:44 AM
  • News

    Limitless Limits From SheBair

    How do you limit executive compensation without politically difficult limits? Don’t use limits, of course. Thanks SheBair! We were worried there for a minute! Banking agencies should become more active in setting compensation standards that are “principles-based” without setting specific amounts for pay, Bair said today in an interview with Bloomberg Television in Washington. How […]

    / Aug 5, 2009 at 5:56 PM
  • News

    Toxic/Illiquid/Legacy Assets Staying Put For Now

    As expected, the FDIC confirmed today that it is delaying the initial test of one of its toxic asset programs.The successful bank capital raises and renewed investor confidence in the banking system have provided FDIC Chairman Sheila Bair with enough evidence that the Legacy Loan Program can be placed in a holding pattern for now. […]

    / Jun 3, 2009 at 5:36 PM
  • News

    The Not-So-Invisible Hand

    Once upon a time, markets in this country functioned based on economic Darwinism. It was pretty simple: the strong survived, the weak perished and the strong were then rewarded by feasting on the remains of the economically inept. In what is sure to be the first of many intrusions from the various regulators in this […]

    / Jun 1, 2009 at 10:49 AM
  • News

    Damn The Receivership, Full Speed Ahead!

    We cannot decide if we think it is good news or bad news that BankUnited seems to be proceeding as if nothing at all is fucked, even though it was “closed and sold” not 48 hours ago. Aren’t dramatic and painful changes supposed to follow hard-upon after such passings? Florida-based BankUnited, which was closed by […]

    / May 22, 2009 at 1:50 PM
  • News

    The Capitalist Conflict

    That the United States would be more than fleetingly conflicted about the role of capitalism in saving capitalism might be surprising- in any other age. Today, we can only shake our heads watching the government publicly disembowel the “money men” before, nearly in the same breath, pleading with them to jump in and fulfill their […]

    / May 22, 2009 at 11:19 AM
  • News

    Release The Hounds

    Heads will roll. Federal Deposit Insurance Corp. Chairman Sheila Bair said some bank chief executives will be replaced in the next couple of months as the U.S. scrutinizes lenders subjected to tests to evaluate their financial strength. “Management needs to be evaluated,” Bair said today on Bloomberg Television’s “Political Capital with Al Hunt,” to be […]

    / May 15, 2009 at 12:39 PM
  • News

    Floating Above The Clouds

    To keep the engine in this fantasy hot-air blimp running, you occasionally have to steal some petrol from the passengers, and then paint “Complaint Office” on the door that leads out to thin air and a 9,500 foot drop. Oh, and you have to borrow a bunch of cash to pay the landing crew. The […]

    / May 6, 2009 at 5:57 PM
  • News

    Got It In Just Under The Wire

    If you had any doubt that the theme for this decade’s party is “Clueless” then you haven’t been paying attention. (We are at a loss to explain why Merrill Lynch keeps throwing fetes at warm climate located Ritz Carltons in the absence of this basic fact). What? More evidence? How about this: PR Week magazine […]

    / Mar 6, 2009 at 9:38 AM
  • News

    Bailout Nation Will Tolerate No Dissent

    Message to diligent administrators concerned with the preservation of taxpayer dollars: Get in the way of the bailout juggernaut and you will make powerful enemies. Consider the plight of FDIC head Sheila Bair: Geithner, president of the Federal Reserve Bank of New York, has argued Bair isn’t a team player and is too focused on […]

    / Dec 4, 2008 at 3:41 PM
  • News

    Loan Backers

    What’s the quickest way to assure that lenders will never ever buy another asset based on mortgage income streams? Make it clear that, at any time, the income stream of that mortgage could be modified by a regulator, a judge or the like. How would you value that asset now? Still, foreclosure assistance puts a […]

    / Oct 23, 2008 at 12:07 PM
  • News

    This Is A Dirty Word, This “Unlimited”

    We worried some weeks ago about what the FDIC, who’s capitalization is awfully small to look very useful against any serious glut of bank failures, was going to do if things started to fall apart. It appears we have our answer: The Federal Deposit Insurance Corporation is seeking temporary unlimited borrowing authority from the Treasury […]

    / Oct 1, 2008 at 4:35 PM

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