banking system

The Fraud From Basel

Despite every major US bank being declared by regulators as “well capitalized” prior to the financial crisis, we still found ourselves watching the government plow hundreds of billions of capital into said banks.  How can this be?  The answer is quite simple:  we were lied to.  Maybe that’s a little harsh, after all these banks did meet the regulatory definition of “well capitalized”.  But when push came to shove, market participants rightly ignored regulatory capital.  After all you cannot use things like “deferred tax losses” to pay your bills with.

Fannie Mae and Greece’s Problems Enabled by Basel

On the surface the failures of Fannie Mae and Freddie Mac would appear to have little connection to the fiscal crisis in Greece, outside of both occurring in or around the time of a global financial crisis.  Of course in the case of Fannie and Freddie, primary blame lies with their management and with Congress.  Primary blame for Greece’s problems clearly lies with the Greek government. 

Exciting! But Not True …

The Center for a New American Security is hosting an event on cybersecurity next week. Some fear-mongering in the text of the invite caught my eye:

[A] cyberattack on the United States’ telecommunications, electrical grid, or banking system could pose as serious a threat to U.S. security as an attack carried out by conventional forces.

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