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Ackermann makes half-baked case for reform

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In the debate about the future of financial regulation, most senior bank executives have been notable by their silence, preferring to lobby behind the scenes rather than argue their case in public.

 

So we should welcome Josef Ackermann’s effort to publicly put the case for big banks. In a long screed published in today’s FT, the chief executive of Deutsche Bank makes the argument that cross-border financial institutions are important for the success of the global economy, and that cutting them back to size would be a mistake.

 

It would be easy to dismiss Ackermann’s views as self-serving. After all, he runs a global investment bank that has much to lose from increased regulation, and is chairman of the Institute for International Finance, the talking shop for big banks. 

 

His argument is thoughtful and deserves a more measured response. Nevertheless it has a couple of significant flaws.

from Rolfe Winkler:

Bair on ending “too-big-to-fail”

FDIC Chairwoman Sheila Bair is right now testifying in front of the Senate Banking Committee on "establishing a framework for systemic risk regulation."  This is of course hugely important.  How do we end "too-big-to-fail?"  And how do we resolve failures that are so big they pose a systemic risk?

There's so much valuable stuff in this testimony, readers should really see all of it.  To help you get through all 30 pages, I've highlighted key passages and provided commentary (in pink italics...I didn't choose pink, btw, Scribd just read my formatting that way!).

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