The Moral Hazard Economy

Appetites for risk should naturally abate after the catastrophic losses we’ve just seen. Will too-rich bailouts prevent that from happening?

Ein Artikel aus der Juli-August HBR. HBR07_09 The Moral Hazard Economy

Destroy All the Money

The former Federal Reserve vice chairman Alan Blinder:

 “At some point, and without knowing the timing, the Fed is going to have to destroy all of the money it is creating.”

32 ACTIONS REQUIRED TO CREATE A STABLE AND EFFECTIVE BANKING SYSTEM

 Aus dem Turner Review, veröffentlicht im März 2009, vor dem Weltfinanzgipfel in London. Wie üblich, sind die britischen Reviews (siehe „Stern Review zu Climate Change“) aussergewöhnlich in Qualität, Präzision und Unabhängigkeit. Nur: Was ist davon umgesetzt???

Lord Adair Turner is the Chairman of the British Financial Services Authority.

 ACTIONS REQUIRED TO CREATE A STABLE AND EFFECTIVE BANKING SYSTEM 

Scenario 2013

Ein interessantes Szenario von Nial Ferguson in der Juli-August Harvard Business Review (Auszug). 

Niall Ferguson(nferguson@hbs.edu) is the Laurence A. Tisch Professor of History at Harvard University and the William Ziegler Professor of Business Administration at Harvard Business School. He is the author of eight books, the most recent beingThe Ascent of Money: A Financial History of the World  (Penguin, 2008). 

One of two scenarios:

Fast-forward to 2013. The government-owned Citibank of America, formed by the forced merger and nationalization of the United States’ two biggest banks, now dominates retail banking. The number of U.S. banks has fallen by half, from 8,534 in 2007. There are just 3,000 hedge funds all over the world—less than a third of the precrisis total. The regulatory framework that was imposed by Treasury Secretary Timothy Geithner in the previous four years has completely changed the financial landscape. With new restrictions on executive compensation, bank capitalization, and derivatives trading, retail banking has become more like a public utility. Even nonbank entities like hedge funds and insurance companies have to operate under the unsleeping eye of the new Financial Authority for the Regulation of Systemic Institutions (FARSI).

Despite FARSI’s extensive powers, the U.S. government is still grappling with the fiscal legacy of the crisis.