17 Matching Annotations
  1. Aug 2017
  2. Apr 2016
    1. Unfortunately, the new rule would leave out key banks with big international presences, like State Street or Bank of NY Mellon, ones that are clearly important global institutions. It would also roll back the Consumer Financial Protection Bureau’s “qualified mortgage” rules, which aim to cut some of the predatory lending practices from the 2008 crisis. It would overhaul the Federal Reserve governance system, possibly making the Fed less independent and more political, as well as undercut regulators’ ability to monitor “shadow banking,” the firms and institutions like hedge funds, asset managers, and money market funds that fall outside the normal banking system but are where many experts believe the next financial crisis will begin.

      This new attempt to roll back the Dodd-Frank reforms is being opposed by Sen. Sherrod Brown, Sen. Elizabeth Warren, and Rep. Maxine Waters.

    2. Now it seems that using the budget bill to water down Dodd-Frank is becoming business as usual. Republicans are pushing a number of potential reform rollbacks as part of the usual end-of-year, closed-door haggling over spending packages. In particular, a bill sponsored by Senator Richard Shelby, S. 1484, has been attached to the 2016 spending bill.
  3. Jan 2016
  4. neweconomicperspectives.org neweconomicperspectives.org
    1. This website offers policy advice and economic analysis from a group of professional economists, legal scholars, and financial market practitioners . We started this blog in order to weigh in on the serious challenges facing the global economy following the financial meltdown in 2007. We aim to provide an accurate description of the cause(s) of the current meltdown as well as some fresh ideas about how policymakers — here and abroad — should address to the continued weakness in their economies.

      Announcing the Bank Whistleblowers United Initial Initiatives

      Our group publicly released four documents on January 29, 2016. The first outlines our proposals, all but one of which could be implemented within 60 days by any newly-elected President (or President Obama) without any new legislation or rulemaking. Most of our proposals consist of the practical steps a President could implement to restore the rule of law to Wall Street.

    1. It is the third bucket that contains the most ambitious applications: “smart contracts” that execute themselves automatically under the right circumstances. Bitcoin can be “programmed” so that it only becomes available under certain conditions.

      In other words, it can facilitate a deferred payment system that works when the payer provides payment in escrow, like Kickstarter and other crowdfunding systems. It could manage deposits on purchase-and-sale agreements and handle escrows on legal judgments, without a third party holding title to the money. The core financial system itself could hold the money.

      Could it be made into a complete deferred payment system for managing loans, mortgages, and coupon bonds? I don’t know how, since the source of those payments is outside the bitcoin system and generally doesn’t exist at the time of the loan or bond purchase. But imagine if a financial system was entirely built around a programmable trust system, then financial instruments themselves become a part of the logic of a company’s assets and liabilities. When a corporate bond coupon comes due the company treasurer doesn't create a transaction, instead the coupon payment is automatically transferred to the holder of the bond by the financial system itself. That is, the structure of the bond has been integrated directly into the financial system for automatic execution.

      If a future government were to implement blockchain technology and legislate its adoption throughout the financial community (perhaps as an option, in parallel with the pre-existing system), it could 'write the code' for legally certified instruments like corporate bonds, mortgages, car loans. It could further write legally permissible derivatives of those instruments (yes, derivatives have tremendous value in reducing risk, when used wisely).

      At that point, financial companies like Vanguard or Fidelity could issue mutual funds whose prospecti assert that the only kind of instruments held by the fund were those certified by the government to use the legislated systems. This could reasonably allow safe and less expensive adoption of powerful financial instruments with far less risk to the system.

      Sure there are plenty of flaws and dangers in this kind of a system. But could they be worked out to create a safer, less expensive, more transparent and more accessible financial system than we currently have? Would it help engender some of the trust that has most recently been lost?

    2. This has implications far beyond the cryptocurrency

      The concept of trust, in the sociological and economic sense, underlies exchange. In the 15th-17th centuries, the Dutch and English dominance of trade owed much to their early development of instruments of credit that allowed merchants to fund and later to insure commercial shipping without the exchange of hard currency, either silver or by physically transporting the currency of the realm. Credit worked because the English and Dutch economies trusted the issuers of credit.

      Francis Fukuyama, a philosopher and political economist at Stanford, wrote a book in 1995, Trust: The Social Virtues and the Creation of Prosperity, on the impact of cultures of trust on entrepreneurial growth. Countries of ‘low trust’ have close family culture who limit trust to relations: France, China, S. Italy. Countries of ‘high trust’ have greater ‘spontaneous sociability’ that encourages the formation of intermediate institutions between the state and the family, that encourage greater entrepreneurial growth: Germany, England, the U.S. – I own the book and (shame on me!) haven’t yet read it.

      I thought of this article in those contexts – of the general need for trusted institutions and the power they have in mediating an economy, and the fascinating questions raised when a new facilitator of trust is introduced.

      How do we trust? Across human history, how have we extended the social role of trust to institutions? If a new modality of trust comes available, how does that change institutional structures and correspondingly the power of individuals, of institutions. How would it change the friction to growth and to decline?

      Prior to reading this article, I had dismissed Bitcoin as a temporary aberration, mostly for criminal enterprises and malcontents. I still feel that way. But the underlying technology and it’s implications – now that’s interesting.

  5. Dec 2015
    1. Omidyar Network, established in 2004 by eBay founder Pierre Omidyar, is funding a company called eCurrency Mint, eCM, for a technology that will allow central banks to issue digital currency called cryptocomplex cash. They have been working with 30 central banks, and two of them are about to announce deployment.

  6. Oct 2015
    1. Um sistema bancário livre, como sugerido na pergunta do Hélio Beltrão, não teria, como disse o Gustavo Franco, "o poder discricionário de criar moeda".

      Mas teria, no entanto, vários outros tipos de controles e balanços, que seriam criados automaticamente pelo mercado, e que tornariam inútil essa capacidade. Em resumo, os bancos não precisariam criar moeda discricionariamente porque não haveria crises monetárias como a de 2008 e, quando houvesse crises importadas elas não trariam risco algum de crise bancária.

      Este arranjo, que para todos os efeitos é apenas uma hipótese imaginária, vale? Bate com a realidade e se encaixa na teoria econômica que Gustavo Franco conhece e defende? Acho que sim, mas seria interessante ouvir o que o Gustavo Franco pensa. O problema é que isto nunca vai acontecer, porque Gustavo Franco é, como mostra este vídeo, incapaz até mesmo de compreender a pergunta.

  7. Sep 2015
    1. This evidence consists of extracts from the Minutes of Proceedings and Evidence of the Standing Committee on Banking and Commerc
    2. Central bank deposits are a special kind of money generally used only by banks and governments and therefore not generally regarded as part d the money supply in the hands of the public.
    3. Ninety-five per cent. of all our volume of business is being done with what we call exchange of bank deposits—that is simply book-keeping entries in banks against which people write cheques?
    4. the need for a currency gold reserve was to-day largely psychological so far as domestic currency was concerned?
    5. PAPER CURRENCY TO PURCHASE GOLD. Q. Now, as a matter of fact to-day our gold is purchased by the Bank of Canada with notes which it issues .... not redeemable in gold ..... in effect using printing press money .... to purchase gold? Mr. TOWERS: That is the practice all over the world