Archive for the Economy Category

The Blame Game

Ninja and sub-prime loans helped to topple investment banks like Lehman Brothers, but to lay all of the blame at the feet of poor people for the current financial crisis is just downright stupid and oh so wrong. Via Oliver Willis.

Read more

Crisis Management

George Walker Bush is the first US President to graduate with a Master of Business Administration (MBA) — from Harvard Business School no less. As such, you would think that in the middle of this global banking crisis, he would be front and center helping to restore confidence in the marketplace. However, he is completely missing in action. In fact, on Monday when Wall Street and the rest of the financial markets were on their knees, he only provided a brief comment in the middle of a press conference with President Kufuor of Ghana. Yesterday, he made another brief statement. […]

Read more

Short Selling

Banning the short selling of UK financial stocks by the Financial Service Authority is government intervention I can get behind. Had they done this even a week ago, HBOS would most likely still be standing on its own. That said, better late than never. The Times, September 19 2008 Ban on speculators who could break the banks Siobhan Kennedy and Philip Webster Speculators and hedge funds have been banned from betting on British banks going bust in a dramatic move by the City’s regulator. The Financial Services Authority hopes that the temporary crackdown will prevent the downward spirals of bank […]

Read more

Moral Hazard Revisited

Charles Goodhart (emeritus professor of banking and finance at the London School of Economics and a former member of the Bank of England’s monetary policy committee writes in an article for the Financial Times that “worrying about moral hazard in the current circumstances is rather like refusing to sell fire insurance just after the Great Fire of London for fear of adversely affecting future behaviour.” I completely disagree. Things may be catastrophic, but that does not mean that we should not have a proper debate about government’s role in maintaining stability within the global banking system — yes, even in […]

Read more

Financial Moral Hazard

For anyone who thinks I might be going soft because I used God’s name twice in the last entry, I have not. I still think that while government has a role to play during periods of financial crisis, the greedy bankers who created this mess need to be held accountable for their reckless business decisions. Government (whether here in the UK or America) should not have to repeatedly bail-out these financial institutions (especially investment banks who do not take deposits) because it encourages continued excessive risk-taking. And by doing so, government is creating a moral hazard — as the banks […]

Read more
Page 3 of 612345...Last »