Tag Archives: balance sheets

Financial innovations behind the US real estate boom and bust of 2002-2008

As we commemorate the 10th anniversary of the Lehman Brothers bankruptcy, which marked the point where the US financial system truly moved into crisis, it’s worth reviewing the innovations that led to the real estate bubble that lay behind Lehman’s (and Bear Stearns’) problems: the separation of mortgage origination from who owned the debt; securitisation;… Continue Reading

Even now, banks are still not safely capitalised

A recent speaker on the MFin mentioned, almost in passing, that he didn’t think the Basel III regulatory system would actually be implemented, so flawed was its approach. I thought this sounded a little exaggerated but a recent speech from the the Vice Chairman of the Federal Deposit Insurance Commission (FDIC), Thomas Hoenig, suggests our… Continue Reading