Is Bernanke Making the Wrong Concession?
October 01, 2009
As I've said before, I admire the Fed chairman's political touch, which he demonstrated again today by making a key concession to Fed critics and skeptics: Apparently Bernanke is now willing to share power for keeping an eye on systemic risk with a council of regulators. It's the kind of thing people like FDIC chairman Sheila Bair have proposed, so that the Fed doesn't end up cornering the market on financial regulatory authority. I just wonder if this is the right concession to make. For one thing, I'm not entirely sure how a council of regulators is supposed to work.
The Chinese, Their Dollar Reserves, and Our Trade Scuffle
September 15, 2009
The good news is that the Chinese have decided to try to resolve the dispute between our two countries over their tire exports at the World Trade Organization, meaning "the disagreement may be containable," as the Journal puts it today.
What Was Sheila Bair Getting At?
September 06, 2009
I'm coming a little late to Sheila Bair's intriguing Times op-ed from last week, but I think Tim Fernholz basically got it right over at The Prospect: Bair wasn't kvetching about the administration's regulatory proposals--the kind of thing that got her in Tim Geithner's crosshairs a few weeks back. She was taking aim at even more radical proposals for regulatory consolidation, like what Sen. Mark Warner lays out here. Basically, the administration wants to fold the underwhelming Office of Thrift Supervision (OTS) into the Office of the Comptroller of the Currency--the two agencies that regula
While I'm Out...
August 17, 2009
For those who come directly to The Stash rather than clicking through from the homepage, here are two recent pieces of mine that might be worth checking out. The first is a profile of Lee Sachs, Tim Geithner's top financial markets advisor at Treasury. The second is a piece we posted late last week about why it could be years (a decade or so) before the economy returns to normal self-sustaining growth--and why (shudder) industrial policy may be the best of some lousy options for speeding things up.
August 12, 2009
Should Tim Geithner's Wall Street consigliere make us queasy?
What Did Geithner Say To Bernanke?
August 04, 2009
My esteemed colleague Noam Scheiber cites today’s report from the Wall Street Journal about Secretary of the Treasury Tim Geithner blowing his top at the heads of the various financial agencies, including the Federal Reserve, for quarreling over who will have jurisdiction for regulating different financial services. Interestingly, Geithner is reported to have chastised the FDIC’s Sheila Bair and SEC chairwoman Mary Schapiro for objecting to the administration’s plan to vest most regulatory functions in the Federal Reserve. Geithner is not reported to have bawled out Fed chairman Ben Bernanke
Who's Afraid Of Consumer Financial Protection?
July 28, 2009
The debate over re-regulation of the financial sector has finally, and irreversibly, turned partisan. This helps define issues in ways that may be more familiar and thus easier to understand. In the blue corner we have Treasury Secretary Tim Geithner. Secretary Geithner's overall banking policy continues to be problematic, and his broader re-regulation effort is hampered by all the free passes he gave to bank CEOs earlier this year. But on consumer protection he has the right message and he delivered it forcefully to Congress last week: we need a Consumer Financial Protection Agency (CFPA) and
The SE&Ds of Change
July 27, 2009
China has arrived ... again. Beijing is growing confident enough in its own power and position in the world that it is increasingly and actively influencing world events. It can choose--and has chosen, in many cases--to play a helpful role in tackling shared threats. But China has also been standing its ground on disagreements with the United States.
What To Think About Obama's Regulatory Reforms?
June 17, 2009
There are three views on who exactly is behind financial regulatory reform package that has just been presented. Each view has distinct implications for political dynamics going forward. The first view is that Tim Geithner and Larry Summers have genuinely become radical reformers. They see the error of the ways they pursued during the 1990s--both in terms of financial deregulation for the United States and in their advice to other countries, particularly through the capital market liberalization policies urged upon the IMF. They now seek to put globalized finance back in its box and will pursu
Writing in the Washington Post this morning, Tim Geithner and Larry Summers outline a five point plan for dealing with the underlying problems in our financial system, titled "A New Financial Foundation." The authors are not completely clear on what they think caused the current crisis, but you can back out some points from their reasoning--and the implicit view seems quite at odds with reality. Their view: Regulation is overly focused on safety and soundness of individual banks. Reality: There was a complete failure of safety and soundness supervision. This must be fundamental to any financ