Financial Institutions

Operation Choke Point Hysteria: Are Choke Point's Critics Responsible for the Account Closings?

07/17/14

At today's House Judiciary Committee hearing on Operation Choke Point it seemed that Choke Point's critics are conflating a fairly narrow DOJ civil investigation with separate general guidance given by prudential regulators.  In particular, Rep. Issa attempted to tie them together by noting that the DOJ referenced such guidance in its Choke Point subpoenas, but that's quite different than actually bringing a civil action on such a basis (or on the basis of "reputational risk"), which the DOJ has not done.  

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Operation Choke Point: Payday Lending, Porn Stars, and the ACH System

07/15/14

Pop quiz:  what do payday lenders have in common with on-line gun shops, escort services, pornography websites, on-line gambling and the purveyors of drug paraphrenalia or racist materials?  

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Me in DC

07/15/14

A quick note on a couple of events today that might be of interest to Slips readers:

First, I'm participating in an ABI webinar about "chapter 14" and related topics.

Second, I'll be testifying in front of the House Judiciary Committee on proposed legislation to add a subchapter V to chapter 11, for financial institutions.

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Larry Summers' Attempt to Rewrite Cramdown History

06/08/14

Larry Summers has a very interesting book review of Atif Mian and Amir Sufi's book House of Debt in the Financial Times. What's particularly interesting about the book review is not so much what Summers has to say about Mian and Sufi, as his attempt to rewrite history. Summers is trying to cast himself as having been on the right (but losing) side of the cramdown debate.

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Book Review: Jennifer Taub's Other People's Houses (Highly Recommended)

05/28/14

I just read Jennifer Taub's outstanding book Other People's Houses, which is a history of mortgage deregulation and the financial crisis.  The book makes a nice compliment to Kathleen Engel and Patricia McCoy's fantastic The Subprime Virus.

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Siphoning Value through Captives: Private Equity and Securitization

05/22/14

Yves Smith has a fascinating post about how private equity firms (which, as she notes in the comments is largely a polite rebranding of "leveraged buyout firms") charge fees for services provided by captive affiliates to their portfolio companies.  On some level none of it is anything so new--part of the LBO game has always been to suck out fees and dividends from the target company, while gambling that the target would be able to service the debt incurred for its acquisition.

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Regulation of Financial Politics

05/21/14

I have a multi-book review essay on the financial crisis that is now out in the Harvard Law Review. Sadly, Timothy Geithner went to print to late for me to include his book. James Kwak has written a nice response to my essay here.   

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The Politics of Financial Regulation and the Regulation of Financial Politics

03/02/14

I have an new article, The Politics of Financial Regulation and the Regulation of Financial Politics, forthcoming in the Harvard Law Review. The article is a multi-book review essay that serves as a launching pad for a discussion about the role of politics in financial regulation. The basic point is that the real issue in financial regulation is one of neutralizing or harnessing politics.

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Why Do Community Banks Carry Water for the Megabanks?

02/27/14

A phenomenon that has puzzled me for the last several years is why community banks consistently carry water for the megabanks on regulatory reform issues.  I'm hoping that readers might be able to shine some light on this issue.

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