For decades, William Isaac’s insights on the U.S. financial system have been featured in leading news publications. Now, you can browse them all in one location.

MEDIA COVERAGE

in leading business publications

Fannie and Freddie Are Obviously SIFIs. Earth Calling FSOC by Alex Pollock

Fannie and Freddie Are Obviously SIFIs. Earth Calling FSOC by Alex Pollock

January 31, 2014

[My friend Alex Pollock is a resident fellow at the American Enterprise Institute. Here is piece he just published that packs a lot of punch in a very short space.]

January, 2014
Fannie and Freddie Are Obviously SIFIs—Earth Calling FSOC

Alex J. Pollock

The Financial Stability Oversight Council (FSOC), a big committee of regulators, is playing with making insurance companies and asset managers into “SIFIs” (Systemically Important Financial Institutions), regulated by the Federal Reserve in addition to others. There does not appear to be much of an argument for this, other than the Federal Reserve’s belief in its own ability to know what is right for everybody else—a belief for which the history of the Fed provides no support.

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ISAAC ELECTED TO BOARD OF DIRECTORS OF TSYS

ISAAC ELECTED TO BOARD OF DIRECTORS OF TSYS

January 31, 2014

COLUMBUS, Ga.–(BUSINESS WIRE)–January 29, 2014–
TSYS (NYSE: TSS) announced today the election of two new members to its board of directors — William M. Isaac, senior managing director and global head of Financial Institutions for FTI Consulting and former Chairman of the Federal Deposit Insurance Corporation (FDIC); and Connie D. McDaniel, former senior executive at the The Coca-Cola Company and Ernst & Young. The appointments bring the number of TSYS directors to 15.

“We are excited and honored to announce that Bill and Connie have agreed to become the newest members of our board of directors,” said Philip W. Tomlinson, chairman of the board and chief executive officer, TSYS. “Both bring a wealth of knowledge and experience to our company that will be extremely valuable as we continue to grow and expand our role in the ever-changing payments industry.”

William M. Isaac

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BERNANKE’S REAL LOST OPPORTUNITY By Robert Pringle, The Money Trap

BERNANKE’S REAL LOST OPPORTUNITY By Robert Pringle, The Money Trap

January 29, 2014

[Robert Pringle is founder and chairman of Central Banking Publications, a financial publisher specializing in public policy and financial markets. Central Banking Journal, which he has edited for twenty years, has subscribers in 120 countries including the great majority of the world’s central banks. I recommend to you one of his latest articles on Fed Chairman Bernanke’s Lost Opportunity.]

Given that he was at the heart of monetary policy making before, during and after the biggest monetary disaster of all time, Ben Bernanke should be mightily pleased with the reviews he has been getting as he leaves office as Fed chairman. All but a disgruntled minority give him full marks for leading the efforts to combat the financial crisis of 2008 and the rapid onset of depression. Given the impotence of fiscal policy, monetary policy was ‘the only game in town’ – and it rose to the challenge. A few of the career obituaries criticise him – some for fuelling the bubble pre-crisis, others for taking undue risks in blowing up the Fed’s balance sheet post-crisis. Others say he should have pressed harder to strengthen the banking system post crisis – though financial system reform is inevitably a political matter. Most broadly accept his own vigorous defence of his record. Which, when you come to think of it, is pretty amazing. It means that most people broadly accept the Fed’s interpretation – that the crisis was down to causes outside the Fed’s control, such as China’s savings glut, irresponsible behaviour by the banks and/or equally irresponsible fiscal policies. The monetary policy-makers have come up smelling of roses; they are saviours of capitalism, their critics ill-informed outsiders.

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HOUSING “WEALTH” AND ILLUSION By Alex J. Pollock

HOUSING “WEALTH” AND ILLUSION By Alex J. Pollock

January 13, 2014

[My friend Alex Pollock of the American Enterprise Institution is always insightful and thoughtful in his political and economic analyses. He has done it again in the following article on the “illusion of wealth” created by the Federal Reserve and other central banks. I believe you will enjoy reading the article and very much recommend it.]

Modern fiat-currency central banks are in the money illusion business, which turns into the wealth illusion business, notably when it comes to housing and the “wealth” represented by houses.

Before 2007, central bankers in the U.S. and Europe managed to convince themselves they had created a new era, “The Great Moderation” — but what they actually presided over was the Era of Great Bubbles.

Here is the link to the full article

The Case for Repealing Dodd-Frank, by Peter J. Wallison, American Enterprise Institute

The Case for Repealing Dodd-Frank, by Peter J. Wallison, American Enterprise Institute

December 9, 2013

[Peter Wallison of the American Enterprise Institute and formerly White House counsel to President Reagan wrote the following article on the causes of the financial crisis of 2008-2009 and the Dodd-Frank Financial Reform Act. In my view the article is must reading for those concerned about future economic and employment growth in the U.S.]

 

Peter J. Wallison holds the Arthur F. Burns Chair in Financial Policy Studies at the American Enterprise Institute. Previously he practiced banking, corporate, and financial law at Gibson, Dunn & Crutcher in Washington, D.C., and in New York. He also served as White House Counsel in the Reagan Administration. A graduate of Harvard College, Mr. Wallison received his law degree from Harvard Law School and is a regular contributor to the Wall Street Journal, among many other publications. He is the editor, co-editor, author, or co-author of numerous books, including Ronald Reagan: The Power of Conviction and the Success of His Presidency and Bad History, Worse Policy: How a False Narrative about the Financial Crisis Led to the Dodd-Frank Act.

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DAVID STOCKMAN SAYS CENTRAL BANKS CREATING WORLDWIDE BUBBLES

DAVID STOCKMAN SAYS CENTRAL BANKS CREATING WORLDWIDE BUBBLES

December 2, 2013

[David Stockman, former member of Congress and former director of the Office of Management and Budget under President Reagan, declared in a recent interview on CNBC that the Federal Reserve and other central banks are creating major asset bubbles that will end very badly and cause serious economic turmoil throughout the world. I recommend the interview to you.]

A link to the interview follows:

http://www.cnbc.com/id/101230045

THE FED’S LAST TROUBLEMAKER By Nancy Cook

THE FED’S LAST TROUBLEMAKER By Nancy Cook

November 2, 2013

[Below is a link to an insightful article in the National Journal about Federal Reserve Board Governor Dan Tarullo’s drive to fundamentally alter the face of bank regulation in the U.S. and abroad. It is well worth reading as it provides a good profile of Dan Tarullo and his policy objectives. The article provides good insights into the regulatory environment banks have been and will be facing.]

When Daniel Tarullo arrived at the Federal Reserve Board in January 2009, the economy was still in a free fall. The country had shed 3.6 million jobs in the past year, with cuts at major companies like Home Depot, Microsoft, and Boeing. Across the U.S., home prices had dropped precipitously. And, two days after Tarullo assumed his post as one of seven Federal Reserve governors—some of the most powerful economic officials in the world—the stock market plunged and recorded one of its worst drops on record for the month of January.

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Can the ‘disastrous nexus’ of banks and governments be controlled? No. by Alex J. Pollock

Can the ‘disastrous nexus’ of banks and governments be controlled? No. by Alex J. Pollock

November 1, 2013

[Alex Pollock, Resident Fellow at the American Enterprise Institute, recently published an important article on the inherent conflicts of interest sovereign nations face in regulating banks. Alex is pessimistic that things will every change, and I hope he is wrong about that. I agree with Alex that it will likely not be possible to eliminate the conflicts but we can and must curtail them.]

The president of the Deutsche Bundesbank, Jens Weidmann, discussed in a recent essay, “Stop Encouraging Banks to Load Up on State Debt,” what he calls the “disastrous sovereign-banking nexus” — in other words, the disastrous interaction of governments and banks. Governments can reduce their own solvency by bailing out insolvent banks — and can even become themselves insolvent and in need of bailouts by doing so, as in the cases of Ireland, Iceland, and Cyprus. On the other hand, banks can become insolvent by making excessive loans to, or investments in, their own or other governments, which turn out to be financial mistakes, as is exemplified in the European sovereign debt crisis and its ongoing travails.

Loans to sovereign governments are granted favored status by bank regulations and indeed are promoted by them, as having no risk-to-one-borrower limits for example, as well as very low or zero capital requirements, and being often referred to as “risk-free.” But in fact nothing is more common in financial history right up to now than defaults by governments on their debt. There have been about 250 defaults on sovereign debt since 1800, including widespread government defaults in the 1980s and the 21st century defaults by Greece and Argentina. Of course, a possible default by the United States government has been talked about of late ad nauseam.

Here is the link to the full article

The Bigger Battle Behind the Shutdown By David Malpass

The Bigger Battle Behind the Shutdown By David Malpass

October 11, 2013

David Malpass, President of Encima Global LLC and former Deputy Assistant Treasury Secretary in the Reagan administration, wrote a constructive and powerful piece about the need to get government spending under control. It was published in the Wall Street Journal on October 10, 2013. David has given me permission to post it to my website and I encourage you to read it.

 

The Bigger Battle Behind the Shutdown
A staggering $250 billion per month, 80% of spending, runs on autopilot without congressional control.

By DAVID MALPASS
At its core, the shutdown is part of a much bigger battle to restrain the federal government. It is spending $3.6 trillion per year without a budget, and its expenditures are expected to increase rapidly in the years ahead.

Meanwhile, the government has piled up $17 trillion in debt and $60 trillion more in unfunded spending promises. The Federal Reserve will borrow $1.1 trillion in 2013 alone to buy bonds—and it reserves the right to borrow unlimited amounts for future bond purchases without congressional or presidential permission.

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