Despite new regulations and outright promises from CEO Lloyd Blankfein, Goldman Sachs is once again engaging in proprietary trading. A practice that lead to a $550 million fine from the SEC when Goldman Sachs mislead clients in order to promote its own accounts. The solution under Dodd-Frank to this behavior was the Volker Rule but now it seems Goldman Sachs is prop trading anyway.
|By: David Dayen Thursday October 11, 2012 6:00 am|
The IMF has released a new study showing that, in essence, the world would be a much safer place if international banks stopped trading in the financial markets.
|By: David Dayen Wednesday August 29, 2012 4:20 pm|
Whither the Volcker rule? After a flurry of discussion about it in the wake of JPMorgan Chase’s Fail Whale trades, we’ve heard significantly less of late. In fact, regulators blew through a July deadline on finalizing the Volcker rule. The last word we had was that the deadline was pushed back to the end of the year.
More time means more opportunity for big banks to lobby over various exemptions. And that’s just what they’re doing, attempting to take a little loophole they found in the initial language and blow it wide open.
|By: David Dayen Wednesday July 11, 2012 10:37 am|
Here’s a classic example of how corporations manage expectations. A couple weeks ago, on the same day as the Supreme Court ruling on the Affordable Care Act, the New York Times reported that JPMorgan Chase’s losses from the Fail Whale trades could reach as high as $9 billion. Their sources were “people who have been briefed on the situation.” I wrote at the time that “I could see how the PR strategy would be to leak a high number and back into the lower (but still awful) one, and taking that as a ‘win’ in the markets.”
|By: David Dayen Wednesday June 13, 2012 1:00 pm|
I don’t think it was too much of a surprise that today’s hearing with Jamie Dimon was something less than stringent. Very few Senators bothered to show up with anything more than a list of questions and a pallid expression. The very structure of the hearing, with one round of five minutes of questioning, wasn’t conducive to being very meaningful. But there were still a few interesting moments.
|By: David Dayen Wednesday May 30, 2012 8:45 am|
Joe Nocera admitted yesterday, building on previous opinion and research, that Dodd-Frank, the financial reform law, was essentially too complex to work. He cites Sallie Krawcheck, who notes that the complexity of the trades JPMorgan Chase’s Chief Investment Office made led to the bank misunderstanding and mismanaging the risks. Aside from banks being too big to fail, her comments lead to the conclusion that mega-banks are actually too complex to manage.
|By: David Dayen Friday May 18, 2012 7:30 am|
Volcker rule co-authors Jeff Merkley and Carl Levin think that the JPMorgan Chase “Fail Whale” trade offers an opportunity to get the regulatory apparatus back on point with their vision of the rule, one that they say should be stronger in barring the types of risky trading from occurring at commercial banks.
|By: David Dayen Thursday May 17, 2012 6:21 am|
I’m going to post a transcript, edited somewhat for clarity, of an interview I did with Professor Warren yesterday afternoon. But I want to highlight the very last thing we talked about. After Warren discussed how, without meaningful civil and criminal investigations of the financial sector, it will not be possible to “clean out the system and rebuild it,” I asked her if she was confident that the current set of investigations, in particular the task force co-chaired by Eric Schneiderman, looking into criminal actions in the securitization process, would yield this level of accountability. She had a simple answer:
“I am not confident. No. And that’s the answer to your question. The American people are pushing for more accountability. They need to keep on pushing until it happens.”
|By: David Dayen Monday May 14, 2012 8:00 am|
Three JPMorgan Chase executives will take the fall for the “Fail Whale” trades that have so far cost the firm $2 billion. But Bruno Iskil, the actual London Whale, so far still has a job, for some reason, as does Jamie Dimon, the CEO who has been on an apology tour for his lack of awareness of the trading losses.
|By: David Dayen Friday May 11, 2012 1:30 pm|
The fallout from JPMorgan Chase’s “Fail Whale” trade (I’m trying to coin this phrase, so help me out, will you?) continues. But there’s been a thread in one section of the liberal blogosphere that has confounded me. For some reason, writers are trying to position this as a problem for Mitt Romney.