Recommended reading: The upcoming FDIC quarterly contains a fantastic article on how, if Dodd-Frank were law then, Lehman Brothers might have been liquidated in a more orderly and rapid fashion after its failure. The article is a nice summary of the events leading up to the Lehman failure, the relevant provisions of the Dodd Frank Act, and a description of how these would have been implemented in the case of Lehman. I learned a number of things about how the financial regulation will look going forward. Something I did not know from Dodd-Frank’s orderly liquidation process is that “The Dodd-Frank Act provides that the FDIC may borrow funds from the Department of the Treasury, among other things, to make loans to, or guarantee obligations of, a covered financial company or a bridge financial company to provide liquidity for the operations of the receivership and the bridge financial company.” At least according to current law, any losses on this mini-bailout are born by the industry, not the taxpayer.
- RT @GrupoGuayacan: Professor @yaelhochberg talks about creating a risk capital industry and the role of different sectors in the ecosystem.… 1 day ago
- RT @themadstone: The only winner tonight is the Voyager probe, which is speeding away from the Earth at 17 kilometers/second #debatenight 4 days ago
- AIG amusing diversions bailout bank regulation Bernanke CDS derivatives Dodd-Frank Act Euro Debt Crisis FDIC Fed Finance & the Public Interest financial crisis Financial Crisis Inquiry Commission financial reform Goldman Sachs GSEs Lehman Brothers MBS mortgages pensions public finance recession regulation SEC securitization TARP too big to fail Treasury Uncategorized