Too Big to Fail (TBTF)

I Can't Give Everything Away

02/25/16

Some thoughts on the new rules for broker-dealer OLA cases, over at Dealb%k.

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Two Cheers for Fannie and Freddie Synthetic CDOs

12/31/15

My ears perk up whenever I hear the musical words "synthetic collateralized debt offering". (Bill Bratton and I did write the paper on history of these crazy things, after all....) So, it was with interest that I read a Wall Street Journal editorial decrying Fannie Mae and Freddie Mac's use of synthetic CDOs to transfer credit risk on mortgages to the private market through the STACR and Connecticut Avenue programs.

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Private Equity's Private Bill to Amend the Trust Indenture Act

12/07/15

One of the many creatures attempting to crawl its way onto the back of the omnibus appropriations bill is an amendment to the Trust Indenture Act.  The Trust Indenture Act is the 1939 securities law that is the major protection for bondholders. Among other things, the Trust Indenture Act prohibits any action to "impair or affect" the right of bondholders to payment or to institute suit for nonpayment absent the individual bondholder's consent.

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Glass-Steagall Is Campaign Finance Reform

11/29/15

The financial wonkosphere just doesn't get it about Glass-Steagall.  Pieces like this one by Matt O'Brien concentrate on the questions of whether Glass-Steagall would have prevented the last crisis or whether it is better than other approaches to reducing systemic risk.  That misses the point entirely about why a return to Glass-Steagall is so important.

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The Ibanez Property Ring

11/09/15

There’s an interesting new article out on the celebrated Massachusetts U.S. Bank v. Ibanez case that suggests that the defendant, Antonio Ibanez, was at the center of a property fraud ring. It's not clear to me that there was anything illegal about Ibanez's activities, but even if there were, I don't think it much matters.  

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Glass-Steagal: It's the Politics, Stupid!

10/14/15

It was like eight nights of Chanukkah in one for me watching the Democratic debate last night. There was a Glass-Steagal lovefest going on. But here's the thing:  no one seems to get why Glass-Steagal was important or the connection between Glass-Steagal and the financial crisis.

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Covenant Banking

10/14/15

A new book out by University of Minnesota Law Professors Claire Hill and Richard Painter proposes a really intriguing proposal for disciplining wayward financial services firms: "covenant banking." The problem, as Hill and Painter observe, is that when things go badly at a financial institution, the

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Pie and Mash

07/28/15

Or a bit of this this and that.

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