Category Archives: Bank Regulation

The Known and the Unknown

“There are known knowns… there are known unknowns… and there are unknown unknowns…”  Donald Rumsfeld

In this age of uncertainty over the regulatory impact on the banking industry we turn to former Secretary of Defense, Don Rumsfeld[1] for some guidance on how to think about managing counterparty risk. Let’s break down this quote and see where it leads us.

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My Mind Is Made Up, Don’t Confuse Me With The Facts

Senator Elizabeth Warren was back in the news recently spinning her one issue platform (perhaps presidential) calling for the breaking up of Citigroup. In her reference to the breakup of Citigroup she said, “ We should have broken you up into little pieces when we had the chance.” What those pieces would be one can only wonder because Senator Warren hasn’t let us in on the specifics of her plan. Though she does seem sure that their sheer size is the problem of the major US banks. She went on to say, “Can someone pass something, anything to reign in these banks?” she pleaded in her news conference.”  Uh, Dodd Frank? Basel III? The new capital, leverage and liquidity rules are doing more to shrink the size of the major banks than Warren wants to admit or realizes.

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