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Daily Archives: November 16, 2014

The Big Bank Theory: Breaking Down the Breakup Arguments

“The 2008 financial crisis threw into sharp relief the issue of “too-big-to-fail” (TBTF)—the challenge posed by financial institutions that were bailed out on concerns that their failure would cause damage to the rest of the financial system and the overall economy. Since then, policymakers and regulators have wrestled with how to address this problem. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) put in place a series of measures to address the policy challenges of TBTF firms, including rules to enhance prudential supervision of individual institutions and reforms aimed at improving oversight of the overall financial system. Regulators have since agreed at a global level to yet-tougher prudential standards for large financial companies. Dodd-Frank also established a new legal authority to resolve a large and complex financial institution without the need for taxpayer support or further disruption to the financial system. Have these sweeping reforms have gone far enough in addressing the policy challenge of large, complex financial institutions? If they have not, then further measures would be appropriate, including breaking up or shrinking the size of large financial institutions. Such efforts would aim to eliminate perceived government subsidies to large banks that might support their size, and thereby to lessen the purported negative impacts of problems associated with these institutions. But such actions would impose costs, on top of those already associated with the steps taken to date. These costs must be weighed against benefits in order to decide on the appropriate course of action. This paper, a product of the Bipartisan Policy Center’s Financial Regulatory Reform Initiative, assesses those costs and benefits. What would be the consequences of breaking up the country’s biggest banks? What would dramatically shrinking their size mean for the financial sector, the U.S. economy, and the customers of these institutions? How would such a strategy work? This paper seeks to answer these important questions. We conclude that the reforms undertaken since the financial crisis have gone a long way toward addressing the TBTF issue. Proposals to break up major financial institutions entail greater costs than the benefits they would provide and are potentially outright counterproductive. It would be better to allow Dodd-Frank and other U.S. and global reforms to work as intended, rather than to break up the largest banks. Indeed, if Dodd-Frank works as intended, then there is no need for a break up.”

European Banking Union: An Immediate Tool for Euro Crisis Management

Paper prepared for the Istituto Affari Internazionali (IAI), October 2014. European Banking Union: An Immediate Tool for Euro Crisis Management and a Long-Term Project for the Single Market by Giulia Rosa Maria Cavallo. “After the adoption of a single monetary policy which commits the European Central Bank to maintaining the euro’s purchasing power and price stability in… Continue Reading

Signs of stress must not be ignored, IEA warns in its new World Energy Outlook

“Events of the last year have increased many of the long-term uncertainties facing the global energy sector, says the International Energy Agency’s (IEA) World Energy Outlook 2014 (WEO-2014). It warns against the risk that current events distract decision makers from recognising and tackling the longer-term signs of stress that are emerging in the energy system. In the… Continue Reading

Impact and implementation challenges of Basel framework for emerging market, developing and small economies

BCBS Working Papers No 27, November 2014: “This Working Paper assesses the potential impact and implementation challenges of specific standards issued by the Basel Committee in the context of emerging market, developing and small economies. Additionally, it outlines practical steps that can be taken by authorities in these jurisdictions to implement global standards and enhance… Continue Reading

New on LLRX – Guide To Privacy Resources 2015

Via LLRX.com – Guide To Privacy Resources 2015 – Marcus P. Zillman’s guide is a comprehensive listing of privacy resources currently available on the Internet that impact your email, smartphones, websites, hard drives, files and data. Sources include associations, indexes, search engines as well as individual websites and organizations that provide the latest technology and information to raise awareness… Continue Reading

DATA + DESIGN a simple introduction to preparing and visualizing information

“Information design is about understanding data. Whether you’re writing an article for your newspaper, showing the results of a campaign, introducing your academic research, illustrating your team’s performance metrics, or shedding light on civic issues, you need to know how to present your data so that other people can understand it. Regardless of what tools you use… Continue Reading

Google launches application to track global fish poaching

SkyTruth, Oceana & Google Announce New Technology Initiative to Illuminate Global Fishing Activity: “SkyTruth, Oceana and Google announced Global Fishing Watch, a big data technology platform that leverages satellite data to create the first global view of commercial fishing. On November 14, 2014, a prototype was unveiled at the 2014 IUCN World Parks Congress in… Continue Reading