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 joint final rule laying out what the largest and most complex financial firms must include in so-called living wills they’re required to file. The panel also approved contingency planning guidelines for insured banks. … Regulators are requiring financial firms to file plans that are developed under the context of the bankruptcy code, with each designed to give a blueprint for how a firm could be taken apart.
And, lest your estate planning was going to be along the lines of “I must keep in good health and not die,” the Feds are on to that scheme too. From the rule:
Several commenters were concerned that the Proposed Rule favored resolution over recovery and was biased in favor of separation of the insured depository institution from the parent organization rather than looking to maintain enterprise value. By issuing the Rule, the FDIC does not intend to substitute resolution planning for recovery planning. Both are very important and serve complementary purposes. The Rule, however, focuses on resolution planning.
It turns out, though, that this may be a bit of an exaggeration. Continue reading »
[Madoff] sees himself at this stage as a kind of truth-teller. He has disdain not only for the industry but for the regulators. “The SEC,” he says, “looks terrible in this thing.” And he doesn’t see himself as the only guilty party on Wall Street. “It’s unbelievable, Goldman … no one has any criminal convictions. The whole new regulatory reform is a joke. The whole government is a Ponzi scheme.” [NYM, earlier]
With the passing of the Dodd-Frank Bill, one pesky thing that banks have had to spent a couple hours getting in line with is the Volcker Rule, and what it means for their proprietary trading desks. Whether to spin them off, send the employees to a farm in the country where they can run around, move them to the basement or just rename the group the ‘troprietary prading’ unit, about which no one will be the wiser, the whole thing has been a bit of a headache. One person who hasn’t lost any sleep over the mandate, however, is Vikram Pandit. Because unlike his counterparts at say, Goldman, who’ve clutched their pearls and felt faint at the thought of a world without prop, Vickles got behind the rule before it was even a twinkle in Volcker’s eye. Continue reading »
While Wall Street publicly is dismantling its dedicated proprietary trading desks, some veterans of the Street are skeptical that the banks will really stop trading with their own money. They say banks could continue making house bets by disguising proprietary trading as making markets for clients. House bets, when they are mixed with client trades, are more difficult for regulators to detect. “To me, it is all smoke and mirrors,” one former Goldman managing director said. “The truth is that most of the position-taking occurs at the market-making level.” [Reuters]
From the mailbag: Continue reading »
I’m going to throw something out there that probably shouldn’t come as too much of a shock, knowing what we know about Matt Taibbi, the boy who spent months of late nights hunched over at his typewriter, gnawing the skin off his knuckles trying to figure out how those crooks at Goldman Sachs do it, reportedly threw scalding hot coffee in the face of a reporter who’d offered him constructive criticism and, on at least on occasion, kept a thermos of horse semen in his fridge to later be baked into a pie and smashed into an unsuspecting victim’s face. And here’s what: Matt Taibbi is the kind of guy who will install surveillance cameras in your home and office, without your knowledge, if he is under the believe you’re screwing him over. Ex-girlfriends can probably attest to this fact and now, sort of embarrassingly, Wall Street and Washington can too. Because Matt Taibbi did it to them, and today, in his duty as an American citizen, reports back on what he saw. We’re lucky he did this and will merely describe the scene to us, sparing us the horror show of actually watching it go down ourselves, which would be a harrowing experience. Continue reading »
He doesn’t want to put the words in your mouth, but if *someone* wanted to ask him how good it felt school the Chinese in that pick-up game, that’d be okay by TG (and if anyone wants to go, he’s got sneaks in the car and this suit is a breakaway).
Later today at NYU Stern, Timothy Geithner, US Treasury Secretary, will give his first public remarks since the enactment of the Wall Street Reform and Consumer Protection Act. The Secretary will address the core principles guiding the implementation of these historic reforms and how they will lay the foundation for a new, strong and stable American financial system. After his remarks, the Secretary will answer audience questions. Due to security and space limitations, the event is viewable via a live video link beginning at 4 p.m. Please note that Real Player is required.–NYU Stern Public Affairs
