"Speculation: There’s a critique of the regulators and key decision makers during the crisis that invokes cultural capital and the idea that regulators are socialized with Wall Street in a way that it is difficult for them to exercise any type of power over them, to see their interests in conflict. I wonder if the same is true for the corporate sector. As the firm goes global, and as the white-collar workforce is broken by computerization and globalization, more and more elite corporate positions will be filled by those leaving Wall Street. (Has this already happened? Data/Studies?) If so, you’ll see an even more lucrative revolving door between corporate elites and financial elites. As such, any natural checks to financial sector power coming from the corporate market space is less likely to happen."

"The lesson here is that if we want serious regulation of banks, we can't trust it to be done by bank regulators. We've seen the Fed and the OCC time and time again bend over backwards to let the banks out of statutory requirements. We've seen this with inaction (HOEPA regs), with aggressive preemption (and OCC is back to its old tricks...).

And this isn't just in the realm of consumer finance. This is also in the safety and soundness area. I'm not talking about stretched interpretations of section 13(3) of the Federal Reserve Act. I'm talking about affiliate transaction rules and Prompt Corrective Action, cornerstones of the safety-and-soundness regime. Saule Omarova has a great paper that shows how the Fed granted affiliate transaction waivers like a drunken sailor during the financial crisis.  Those were rules that went back to 1932-33 as part of Glass-Steagal.  

And remember Prompt Corrective Action? That was a response to all of the Federal Home Loan Bank Board's screw ups during the S&L crisis (Who you say? There's a reason the FHLBB doesn't exist any more...). PCA is clear of a bunch of tripwires as you can get. The whole point was to make sure that the bank regulators regulated, not coddled. But Bernanke announced that he was suspending PCA for the banks during the financial crisis. Only after the stress tests cleared the big banks did PCA get applied to the small banks, and with a vengance. What a sorry state of the world we live in where the bank regulators are the last people we can trust to actually regulate the banks. "

"… This was not because they doubted whether there was a moral imperative to pay one's debts. Rather, they were shocked to see the idea of bank credit, based as it was on getting something for nothing, vying for the moral high ground. Credit of this sort was a speculation. Allowing it to flourish was one thing; granting it not only legitimacy, but moral status was horrific. If people were taught to consider their relationship with their banker as analogous to their obligations toward family, community, and state, the multitudes would indeed have come to ruin."

"Where does this all leave us? The rest of the world is intent on pursuing a begger thy neighbor strategy, with the US being the neighbor. I suspect US policymakers will eventually relent; it will be the only choice left. All we can do now is sit back and wait for the inevitable explosion in the US trade deficit, waiting idly by for the next crisis and the "chance" to bring some sanity to the global financial architecture."

"In plain terms, derivatives are THE cause of the Financial Crisis. They are behind EVERY failure/ default that has occurred thus far. The fact that virtually no one is willing to address this issue or include it in the discussion of how to insure we don’t have a Second Round of the Crisis only confirms the fact that no one has a clue how to resolve this situation."

'…These guys aren't number-crunching whizzes making smart investments; what they do is find suckers in some municipal-finance department, corner them in complex lose-lose deals and flay them alive. In a complete subversion of free-market principles, they take no risk, score deals based on political influence rather than competition, keep consumers in the dark — and walk away with big money. "It's not high finance," says Taylor, the former bond regulator. "It's low finance." And even if the regulators manage to catch up with them billions of dollars later, the banks just pay a small fine and move on to the next scam. This isn't capitalism. It's nomadic thievery."'

"So, for large complex financials, capital cannot be measured precisely enough to distinguish conservatively solvent from insolvent banks, and capital positions are always optimistically padded. Given these facts, and I think they are facts, even “hard” capital and leverage restraints are unlikely to prevent misbehavior. Can anything be done about this? Are we doomed to some post-modern quantum mechanical nightmare wherein “Schrödinger’s Banks” are simultaneously alive and dead until some politically-shaped measurement by a regulator forces a collapse of the superposition of states into hunky-doriness?"

"So why not incorporate it into a savings account? Take a small interest rate cut, say a tenth of a percent, from each savings account, and then randomly give that to a few members, conditional on them saving money. I think it’s brilliant, and it doesn’t surprise me that it’s started with credit unions, where some of the most consumer friendly innovation is being tried. Where most commercial banks are looking to payday lenders for innovation, credit unions appear to be looking at cutting edge behavioral “nudge” style work for innovations to help people build their financial lives. How cool is that?"

"Throughout the years, I’ve seen some clever “money hacks” as a result of just keeping myself aware of the latest trends and tricks in personal finance. I’ve also had the great pleasure of reading all of your comments through the years and I know you guys are a very clever bunch, so I was curious what money hacks you use to get a little extra."

"Because the first priority of the Fed is the health of the banking system itself, and not the national economy and the availability of credit to non-banking institutions. They are seeking to drive commercial entities out of secure savings to risk investment again, but providing a safe harbor for the banks while they are doing it, while attempting to maintain the appearance of financial system solvency. "

"3. Accountants like double-entry bookkeeping and balance sheets and stuff so they can keep track of things. They like to record assets on one side, and liabilities on the other side, to make sure that everything adds up, to check that everything's been properly recorded. So they like to list currency as a liability of central banks (even though it isn't, because there's no promise to redeem it, or pay interest on it), and assets on the other side. An accountant would freak out if he recorded currency as a liability and couldn't find an equivalent value of assets. He would say that the central bank is a Ponzi scheme. Which of course it is. And it's just not worth the hassle of trying to explain to accountants that some Ponzi schemes are sustainable, really."

"“We have this very strange situation today in America where we have given banks hundreds of billions of dollars and the president has to beg the banks to lend and they refuse,” Stiglitz said. “What we did was the wrong thing. It has weakened the economy and has increased our deficit, making it more difficult for the future.”"

"Many 401(k) investors last year bailed out of stocks, often the day after big market drops, Hewitt found, with nearly 20 percent of investors switching their assets -- all getting out of stocks. This means they locked in losses, selling low after buying high during the run-up of previous years."

"We aggregate a lot of CD rate data from over twenty major banks, many of which are online banks with very good rates, but those rate tables are spread all across the site. To help you find the best rates, whether it’s across all the banks or at a specific bank, we’ve aggregated that data here."

"We are looking at a concentration of political power in the US banking system that we haven’t seen since the 1830s: Shades of Andrew Jackson vs. the Second Bank of the United States. We put up with a lot from our banking elite in this country, but historically we draw the line at financial power so concentrated it can confront the power of the President."

"In other parts of the book, Brandeis goes on to challenge the conventional stereotype of the banker as conservative—on the contrary, he noted their “financial recklessness”—and he argued that Americans had systematically been “confusing the functions of banker and business man.” He argued for a system of smaller, more local banks.

I’ve been thinking of this lately, as our old friend urbino (who, alas, doesn’t come around here no more) has beaten almost every major pundit to the punch in arguing that if banks have grown too big to fail, then perhaps they ought to be stopped from supersizing themselves...."

"Consequently I think it is possible to think of AIG as the insurer-of-last resort to the United States’ own shadow financial system. That shadow financial system just operated offshore. There was a reason why investors in the UK were buying so many US asset backed securities during the peak years of the credit boom."

"The last six months — if not the last year — logged what felt like a decade’s worth of financial news. So perhaps it isn’t surprising that swings that normally would attract an enormous amount of attention have gone almost unnoticed. Like the near-total collapse of private capital flows."

"Two factor authentication is nothing new, but in the US it's unusual for it to be available in such a common consumer product. A lot of my friends who play the game have gotten authenticators for themselves after seeing people lose their accounts. Sure wish I could easily get the same protection at my bank."

"I think the thesis of the Monetary History has just taken a hit."

"In other words, the Treasury feels that the reason it can’t use the funds in the manner Congress intended is because it believes the banks would act in an unscrupulous manner in order to subvert the intentions of the United States government at a time when the economy is facing its worst crisis since the Great Depression?"