I was surprised at how little coverage there has been about General Motors (GM) clever way of getting a US Government bailout by becoming a bank. Over the quiet holidays GMAC Financial LLC, GM's car finance business, officially converted itself into a bank. As a result, they got $5 billion of the TARP funds through…
Welcome to 2009. For the past couple of weeks, I’ve been posting reasonably frivolous bits and bobs, but now to the serious question: what’s in store this year? For most, 2009 is fairly obviously a year of rationalisation and implementation. Rationalising the issues that led to Lehmans collapse and implementing ways to create liquidity. Rationalising…
Just before Christmas Sir John Gieve, Deputy Governor of the Bank of England, was widely reported as saying that the Bank of England completely missed out on forseeing the crisis of 2008. The reports were based upon an interview Sir John gave for the BBC's Panorama series, which aired on 22nd December. In the programme,…
Just before Christmas Sir John Gieve, Deputy Governor of the Bank of England, was widely reported as saying that the Bank of England completely missed out on forseeing the crisis of 2008. The reports were based upon an interview Sir John gave for the BBC's Panorama series, which aired on 22nd December. In the programme,…
The Wall Street Journal published the original submission to the SEC by analyst Harry Markopolos in 2005, following his claims of 1999 that Bernie Madoff was running a Ponzi scheme. A few highlights: "I am the original source for the information presented herein having first presented my rationale, both verbally and in writing, to the…
The Wall Street Journal published the original submission to the SEC by analyst Harry Markopolos in 2005, following his claims of 1999 that Bernie Madoff was running a Ponzi scheme. A few highlights: "I am the original source for the information presented herein having first presented my rationale, both verbally and in writing, to the…
One reader asked me to look at long-term answers to the banking crisis rather than short-term, after my blog the other day. I will provide a more in-depth answer to this question on January 5th when I make my predictions for 2009. Right now, it needs the full backdrop to answer that question by reviewing…
One reader asked me to look at long-term answers to the banking crisis rather than short-term, after my blog the other day. I will provide a more in-depth answer to this question on January 5th when I make my predictions for 2009. Right now, it needs the full backdrop to answer that question by reviewing…
I've been enjoying an email exchange today with someone who spotted my write-up in the Parliamentary Brief promoting the idea of a bank shareholder guarantee scheme. This reader picked up on my definition of Tier 1 Capital, which is a critical aspect of bank solvency under Basel II. He asked about the definition of Tier…
In his comments to the Treasury Select Committee's enquiry into the crisis yesterday, the Governor of the Bank of England, Mervyn King, said that banks should avoid lending and weakening their capital base individually but that, collectively, this could seriously damage the economy: "Individually, it makes sense … to behave defensively and reduce the size…
