This piece from Nasim, author of The Black Swan is simply too good a piece of advice not to replicate, with full attribution.  The first two points in particular are simply too precious. The message – a debt crisis is the worst kind, and leverage is one of the worst of all bad economic situations. Ten principles for a Black Swan-proof world | Financial Times By Nassim Nicholas Taleb Published: April 7 2009 20:02 | Last updated: April 7 2009 20:02 1. What is fragile should break early while it is still small. Nothing should ever become too big to … Continue reading What is fragile should break early while it is still small | Taleb – The Black Swan

The normally quiet FSA is becoming proactive, taking advantage of the current climate to do deeper assessments of market participants.  In fact they are getting deliberately personal in assessment of market participants. FSA steps up scrutiny in ‘get scary’ drive | FT The Financial Services Authority is delving deeper into the pasts of those it supervises in what solicitors see as a crackdown that could lead to more companies and individuals being excluded from the market. Executives and managers are being called for interviews more often, asked for more detail about their CVs and experience, and quizzed more closely on … Continue reading FSA steps up scrutiny in ‘get scary’ drive

Tett uses Greek metaphors to describe the task G20  and the world needs to realise in terms of the size of the task. Sisyphus was a king sentenced to the punishment of pushing a stone uphill, only to watch it roll back down, and having to repeat the process. As announcements and estimates of the bad debt problem have appeared, the accompanying fix has been drowned out by every new and escalating estimates.  This is the core of the banking crisis that must be addressed, by multiple strategies. In this case I believe that the average person is represented Sisyphus, … Continue reading We are all Sisyphus

In the back rooms of the large banks, capitalism is alive and well.  Financial engineers, those very same folks who created the derivatives and CDO’s are busy addressing the problem, leaving glimmers of hope that hte reason for the banks’ relative silence is that they own the problem and will fix it.  Banks and bankers are nothing if not resilient. Bankers find new focus amid the rubble | Financial Times Many of them are now engaged in financial restructuring, which involves dealing with toxic assets and freeing up or protecting capital. But they will not get fanfares in earnings reports … Continue reading The hush hush work going on in the banks’ to correct matters

The G20 summit is over, and the results produced here.  So what are the outcomes relative to banks, and relative to my earlier assessment of the future of banks;  are there any new clues to the future of nationalisation, bank independence and scope for bank innovation? http://www.g20.org The first nuance is the sub title in the Communiqué relative to bank regulation.  It has been amended from the draft version earlier in the week, from “Reforming financial systems for the future” to the final version “Strengthening financial supervision and regulation”.  This softening is deliberate, and suggests differences between countries as to … Continue reading Does G20 plan ensure bank nationalisation for weak banks in the near term?

The G20 in London released the official working paper on financial regulation today here, along with other working papers. Working groups G-20 Working group 1: Enhancing sound regulation and strengthening transparency (PDF file, 698KB) G-20 Working group 2: Reinforcing international cooperation and promoting integrity in financial markets (PDF file, 548KB) G-20 Working group 3: Reform of the IMF (PDF file, 311KB) G-20 Working Group 4: The World Bank and other multilateral development banks (PDF file, 194KB) Local copy of regulation doc follows [pdf] g20-enhancing-sound-regulation-and-enhancing-transparency-final Continue reading G-20 Working group 1: Enhancing sound regulation and strengthening transparency