Breakingviews

Exchange podcast: Jeb Hensarling

By Rob Cox
June 15, 2016

Congressman Jeb Hensarling, chairman of the U.S. House Financial Services Committee, discusses his proposal to replace the sweeping Wall Street reforms of the Dodd Frank Act, which was passed after the 2008 crisis. The Texas Republican also discussed his recent meeting with Donald Trump, who might find Hensarling a good match for his cabinet should the Republican real-estate mogul become president.

Giving watchdog algorithm keys is slippery slope

June 14, 2016

The CFTC wants to inspect source codes of trading firms without a subpoena. The U.S. agency says it’s needed for records retention. Unclear is whether the regulator can safeguard such intellectual property, and it opens the door for other officials to request similar access.

Finance wakes up to fintech’s systemic dangers

April 19, 2016

The Bank of England’s Andy Haldane and Deutsche Bank boss John Cryan are among 53 financial leaders backing the launch of a new forum to debate financial technology. The abuse of data is a concern. But a bigger risk is how fast and obscurely money can move.

Time for banks to go cold turkey on sovereign fix

April 18, 2016

Europe is considering tightening rules that make it easy for lenders to own government debt. Banks addicted to sovereign punts would suffer, and governments lose wiggle room. Yet reform could hasten euro area integration, while ECB bond-buying makes it a less scary prospect.

Banks can’t rely on lifeboats when Titanic sinks

April 13, 2016

JPMorgan is among five big U.S. firms that failed the living wills test. That’s because they counted on liquidity from other subsidiaries that could be cut off from providing aid when things go awry. The regulators’ message to Wall Street is clear: every man for himself will prevail in the next crisis.

MetLife’s SIFI label doomed by D.C. double-talk

April 8, 2016

A U.S. judge tossed the insurer’s designation as a systemically important financial institution because a regulator couldn’t keep its story straight. FSOC said it both had and hadn’t changed its rules, prompting a decision that it acted arbitrarily. An appeal will be tough to win.

Alternative lenders brace for regulatory onslaught

April 1, 2016

Avant is the first major fintech player to put a former watchdog on its board – ex-FDIC Chair Sheila Bair. Rivals have tapped Wall Street to bolster business. But the mix of new lenders’ success, high charges, rising rates and defaults is catching the eye of financial overseers.

Review: Erin Callan puts nail in Lehman coffin

March 25, 2016

“Full Circle” is an introspective and seemingly cathartic memoir by the ex-CFO of the collapsed investment bank. The sexism Callan says she was subjected to in her final months on Wall Street, however, provides the best evidence yet that poor management is what doomed Lehman.

John Gutfreund takes old Wall St model to grave

March 10, 2016

The ex-Salomon Brothers boss led investment banks from partnerships into prop trading – and ended up in a scandal. His era was, at least, one where bankers’ excesses didn’t put the system at risk. That lends his kind of risk taking a degree of perverse charm that will be missed.

Foreign minnows resist opaque U.S. penalties

February 24, 2016

An Andorran bank has managed to erase its money-laundering black mark. Last year, the Chinese-backed owner of a U.S. wind-farm project won a settlement with D.C. over the secretive CFIUS group’s block on its activities. Overseas Davids can occasionally slay Washington Goliaths.