Updated:
Original:

U.S. Set To Ensure There Are No Palm Beach Papers

Panama's shame will not be repeated in Florida...because there is already more than enough shame there to go around.
Author:

Given the new sh*t that has come to light out of Panama, Jack Lew and his friends next door at the White House are going to go ahead and finalize a rule that’s been in the works for four years, which would tell banks that the rule saying they have to “know their customer” really means what it says.

The White House’s Office of Management and Budget earlier this week accepted for final review a rule that would force banks to identify the owners of companies behind shadowy financial transactions, such as the firms revealed in the Panama Papers scandal or the ones used to buy real estate. It would close a loophole that critics say allows criminal money into the U.S. financial system….

The existing rules don’t require financial institutions to learn the true owner of a corporate entity, which critics have long said encourages corrupt officials across the globe to create shell companies to stash their funds in the U.S. financial system for safekeeping.

U.S. Rule Would Force Banks to Identify Shell-Company Owners [WSJ Risk & Compliance blog]

Related

By Federal Bureau of Prisons (http://www.bop.gov/locations/index.jsp) [Public domain], via Wikimedia Commons

83-Year-Old Gets Four Years For Crimes Of All Panama Papers Characters

‘It’s not even a close question that von der Goltz be incarcerated.’

Spikebrennan at English Wikipedia [GFDL, CC-BY-SA-3.0 or CC BY 2.5], via Wikimedia Commons

Fab Tourre’s Fabulousness Extends To Grading Papers

The newly-minted PhD. Brings more empathy to the task of TAing a class in asset pricing than his students can possibly imagine.

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.