Tag:
Moral Hazard
Latest Headlines
Latest Headlines
Banks proactively restructuring options ARMs
When it comes to cutting mortgage balances for end customers, the biggest banks have consistently maintained that it was a bad idea. It would be unfair to the mortgage customers that did everything right to remain up-to-date on their payments, and it would create a personal moral hazard that would
Moral hazards emerge as home foreclosure delays get worse
This is a great time to be a mortgage deadbeat. You've probably heard of people who have stopped making payments on their mortgage but continue to live in the house and seem rather blasé about the whole thing. For such deadbeats, a perfect storm has allowed them to breathe easier than they would'v
Citigroup: 'Too interwoven to fail'
When asked about too-big-to-fail and Citigroup ( NYSE: C ), Richard Parsons, the chairman of bank's board, told CNBC "It's not a question of too big to fail. It's a question of being too interwoven in the fabric of the global financial life to fail."
Allowing Citi to fail would be akin t
Modest proposal: How to reign in moral hazard
Dodd-Frank fixes more than a few problems in the financial services industry. But the debate will rage for some time about whether it has fixed the problem of too-big-to-fail and moral hazard. One could easily argue that unless compensation practices are reigned in, banks will always be tempted to
Derivatives clearinghouses, the next too-big-to-fail entities?
The end of the Troubled Asset Relief Program (TARP)--recall that it expired on Sunday--was accompanied with a lot of feel-good encomiums. The program will likely end up a lot less costly than may imagined. It seems to have returned big institutions to good health, relatively speaking, for now anyw
Mortgage principal plan to result in losses?
There's a big downside to the recently announced plan that would allow banks to forgive actual principal. Bank of America ( NYSE: BAC ) made headlines by signing up for the plan in a splashy way . The plan covers those suffering from at least a 115 percent loan-to-mortgage value, who will get
The de facto end of too big to fail?
The debate about too big to fail has been raging, with no end in sight. But have the credit rating agencies already made up their mind on the outcome? Standard & Poor's has revised its outlook on Bank of America ( BAC ) and Citigroup ( C ) to negative from stable. A negative outlook indica
Banks still way too big?
It's been in vogue, since the financial crisis started, to lambaste the "too big to fail" idea that lies at the heart of the "moral hazard" problem, which has long plagued the industry. But the bailout has effectively ensured that "too big to fail" will not be ending soon.
The Washington Pos
Brave new financial regulatory structure needed?
What to make of the pyrotechnics from a regulatory point of view? You could argue it two ways: When push came to shove, Henry Paulson and Tim Geithner somehow pulled off a workable rescue, aided in part by Bank of America's and Merrill Lynch's deal. In that sense, the system held, assuming the CDS
Lehman Brothers, RIP
Wow! What else is there to say? In an extraordinary weekend, Wall Street has been remade. We've written recently that Lehman Brothers was another Bear Stearns. But it's even worse. It was forced into bankruptcy despite a frantic weekend of negotiating among top regulators and Wall Street execs. In
