The Gold Standard  

Banks refuse to learn. We had Mr. Peter Sands of Standard Chartered Bank criticising most regulatory proposals including that of the proposal to separate proprietary trading, floated by Paul Volcker in the US. There were news that Royal Bank of Scotland was setting aside large sum as bonuses although UK Treasury approved the bonus pools. There [...]

Say what you will, Simon Johnson and Peter Boone cannot be accused of being unclear and also cannot be accused of being reluctant to bear bad news. They name names. Agree on their recommendation to hike capital requirements on banks substantially. When and if would it happen? Worth reading the whole stuff, however.
In the meantime, [...]

… from some one who straddles both the policy world and the investing world [Mohamed El-Erian in a guestpost in FT Alphaville:

Inevitably, “first best” policy solutions are elusive; and even in the world of second and third best, what is economically desirable is increasingly becoming politically infeasible; and what is politically feasible may well turn [...]

There has been some discussion on why (and not whether) economists missed seeing the crisis coming. I came across this report but I thought most points were already covered in popular discourse/debate on the failure of models, reliance on one single metric of risk (VaR), etc.
But, for the sake of completeness, here is the link to [...]

… www.baselinescenario.com. I do not have to write any foreword for these two links – one on ‘Banks tunnelling and the risk of inflation’ and the other on banks buying toxic assets from each other.
In fact, Simon Johnson does a very good job of showing why banks’ behaviour risks provoking inflation in the US.
Of course, [...]

“In finance, during the late nineteenth century and early twentieth century, whether in London or New York, Berlin or Paris, there was one great divide. On one side stood the big Anglo-Saxon banking firms: J. P. Morgan, Brown Brothers, Barings; on the other the Jewish concerns: the four branches of the Rothscilds, Lazards, the great [...]

My good friend Nitin Pai pointed me in the direction of the blog of Daniel Drezner for a different reason. That should wait. In the meantime, I found this response of his to a column by Fareed Zakaria rather good. I do not wish to spoil the pleasure by adding my own comments. He has said [...]

The column by Martin Wolf in FT on the 19th May is a recommended read. It summarises the issues very well:
We can guess that finance will make a recovery in the years ahead. We can guess, too, that its glory days are behind it for decades, at least in the west. What we do not [...]

I caught up with Willem Buiter after a while.  It was good to read his no-nonsense posts again. This one on the Morgan Stanley enforcing a debt contract on a Kazakh bank, their motivation for doing so, etc., makes for very interesting reading or sad reading, depending on perspective.
What worries me (nay, depresses me) is [...]

The rest of the nation may be getting back to basics, but on Wall Street, paychecks still come with a golden promise. Workers at the largest financial institutions are on track to earn as much money this year as they did before the financial crisis began, because of the strong start of the year for bank profits. [Read [...]