Comments on: Counterparties: Unintended collateral

By: Auros

Auros — Wed, 12 Sep 2012 21:53:43 +0000

So, wait, “thousands of full-time jobs,” across the entire financial industry? _If_ Dodd-Frank really was going to be as effective at preventing a replay of 2008 for the next 60-70 years as Glass-Steagall was at preventing a replay of ’29, wouldn’t that be worthwhile? That’s a big if, of course — I suspect that a simpler regime would both cost less and be more effective. But come on, how many trillions of GDP have been permanently lost? The whole economy was sent into a nearly -10% annualized rate tailspin, and since then has limped along, never actually making up the gap between actual output and long-term potential, leaving millions of potentially-productive Americans on the sidelines. Even TEN thousand new jobs, across the whole banking sector is significantly less than two per bank. (There’s something like 7,500 commercial banks in the US.) We’re probably talking much less than one new employee at small banks — a few extra hours of work for the existing compliance officers — a handful of new people at bigger city / regional banks, and a new medium size team for compliance at the behemoths. This is supposed to be a big deal?

By: Auros

Auros — Tue, 11 Sep 2012 23:21:47 +0000

By: Auros

Auros — Tue, 11 Sep 2012 23:17:29 +0000

So, tens of thousands of full-time jobs, across the entire financial industry? _If_ Dodd-Frank really was going to be as effective at preventing a replay of 2008 for the next 60-70 years as Glass-Steagall was at preventing a replay of ’29, wouldn’t that be worthwhile? That’s a big if, of course — I suspect that a simpler regime would both cost less and be more effective. But come on, how many trillions of GDP have been permanently lost? The whole economy was sent into a nearly -10% annualized rate tailspin, and since then has limped along, never actually making up the gap between actual output and long-term potential, leaving millions of potentially-productive Americans on the sidelines. Ten thousand new compliance offices across the whole banking sector is less than two per bank. (There’s something like 7,500 commercial banks in the US.) So we’re probably talking less than one new employee at small banks — a few extra hours of work for the existing compliance officers — a handful of new people at bigger city / regional banks, and a new medium size team for compliance at the behemoths. This is supposed to be a big deal?