Financial Boom and Gloom: The Credit and Banking Crisis of 2007-2009 and Beyond (Palgrave Macmillan Studies in Banking and Financial Institutions)

Cover......Page 1
Contents......Page 8
List of Tables......Page 11
List of Figures......Page 12
Preface......Page 13
C......Page 17
D......Page 18
L......Page 19
O......Page 20
S......Page 21
U......Page 22
Y......Page 23
Part I: Credit Crunch Ashes and Pains......Page 24
1. Are we running out of bubbles?......Page 26
2. A quadrillion dollars in derivatives......Page 30
3. "26-year- olds with computers are creating financial hydrogen bombs"......Page 33
4. The visible blight of failed bank management......Page 36
5. Debt crisis takes center stage: $62 trillion of CDSs......Page 40
6. Wrong-way risk: the downgrading of monolines......Page 44
7. MBIA and Ambac: a case study......Page 49
Appendix: credit default swaps defined......Page 52
1. Central banks lost control of monetary policy and of supervision......Page 57
2. The fed rushes to protect the markets......Page 61
3. Backwards into the carter years......Page 64
4. LCBGs and systemic risk......Page 67
5. The need for a new glass-steagall act......Page 70
6. Fraud and punishment......Page 73
7. Sovereign wealth funds as lenders of last resort......Page 76
8. Central banks as repositories of last resort......Page 80
1. Effects of financial globalization......Page 84
2. The instruments of financial globalization......Page 88
3. Global structured products......Page 91
4. Auction-rate securities and the attorney general's reaction......Page 94
5. The search for yield weakens credit ratings......Page 98
6. A credit spread alarm......Page 100
7. The impact of globalized crises......Page 103
8. The global sheriff of George Soros......Page 106
Part II: The Subprimes Crisis......Page 110
1. The banking industry's self-inflicted wounds......Page 112
2. Institutionalization of subprime mortgages......Page 115
3. Borrowers at the edge of bankruptcy......Page 119
4. A mare's nest of low quality housing loans......Page 122
5. Economic aftermath of subprimes......Page 126
6. Impact of the subprime crisis on the economy......Page 129
7. A business opportunity for distressed-debt artists......Page 132
1. Credit derivatives......Page 135
2. Risk associated with securitization......Page 138
3. Originate to distribute......Page 142
4. Variable-interest entities......Page 146
5. Structured investment vehicles and conduits......Page 149
6. State funds pay the bill: the case of Florida......Page 152
7. The US government looks at the subprime mess......Page 154
8. The way out of recession is not paved with more debt......Page 157
1. How to lose your money with collateralized debt obligations......Page 161
2. The mechanics of collateralized debt obligations......Page 165
3. Synergy between debt market and equity market......Page 167
4. Credit rating the subprimes......Page 170
5. Spread of the credit risk crisis: a snapshot......Page 174
6. Concentration risk and assets valuations......Page 177
7. A horde of unjustifiable bonuses......Page 180
8. Golden parachutes for failed CEOs......Page 184
1. Lender of last resort......Page 187
2. Northern rock and the FSA......Page 190
3. Failure of prudential supervision......Page 193
4. The many forms of bailouts......Page 196
5. A scandal too far?......Page 199
Part III: Bank Supervisors and Their Remit......Page 204
1. Updating the regulation of free markets......Page 206
2. Liquidity assurance and the regulatory authorities......Page 209
3. Liquidity injection and consumer protection......Page 212
4. Derivatives and government policy......Page 216
5. Regulating derivatives and hedge funds: a case study......Page 219
6. Watch over debt risk......Page 222
7. The global need for new financial regulation......Page 225
8. The important role of accounting standards......Page 228
1. Capital requirements......Page 232
2. Solvency and liquidity......Page 235
3. Liquidity fears......Page 238
4. Liquidity management......Page 241
5. Liquidity stress testing......Page 244
6. Asset-backed commercial paper......Page 248
7. Carry trade......Page 251
8. Liquidity and the carry trade......Page 254
1. The banks' wounded balance sheets......Page 258
2. Financial stability forum......Page 262
3. The shadow banking system destabilizes the economy......Page 265
4. The error of trying a quick fix......Page 268
5. Paulson's restructuring: a call for zero regulation......Page 271
6. Nuts and bolts of Paulson's supervisory restructuring......Page 274
7. The experts' opinion on banks supervision......Page 278
Epilog......Page 282
Notes......Page 287
B......Page 296
D......Page 297
G......Page 298
L......Page 299
O......Page 300
S......Page 301
V......Page 302
Z......Page 303