"Regulating Wall Street" Co-Editor Thomas Cooley breaks down the pros and cons of stimulus spending in this interview on Fox Business.
June 2010 Archives
by Ingo Walter
Oil gushing into the Gulf of Mexico reminds us of the vulnerability confronting even the most sophisticated of production systems to extreme events. It's unlikely that any upstream oil producer and system integrator is more competent than BP in doing what it does best and in managing the associated risks. But here's a case where the firm's core competency nevertheless left it vulnerable to an industrial accident and massive financial losses, in the process creating large external costs for the environment and a significant swath of society. It's far too early to begin a forensic discussion of the BP disaster or come up with sensible solutions for the future.
Read the full opinion edtiorial on Forbes.com
by Kermit Schoenholtz and Paul Wachtel
The derivatives rules in the Senate financial reform bill pose a serious threat to the financial system because they leave critical institutions - including but not limited to derivatives clearinghouses - without a lender of last resort. A major feature of the legislation prohibits any "swaps entity" from receiving federal assistance such as deposit insurance or access to the Federal Reserve's lending facilities. The bill will force banks to spin off their derivatives activities into separate corporate entities. Yet, sweeping the risks inherent in derivatives trading off bank balance sheets does not make them disappear.
Read the full opinion edtiorial on AmericanBanker.com (subscription required)