Tuesday, January 19, 2010

Not good!!!!

Demos offers some evidence on the changing structure of the financial sector in the US. There are now fewer banks in the United States but they are larger, more complex and have continued investing in risky assets during 2009. Somehow it just seems that we are about to lose a big opportunity to modify our global development model and that we could have a new crisis in the near future. Definitely not what some of us expected and very bad news!!!!

1 comment:

Anonymous said...

This Demos report is excellent and has the very latest data on VaR (value-at-risk) ratings, banks' trading revenues, etc. Well worth reading. Until last Friday, I would have been very gloomy about the report's contents. However, since Obama's surprise announcement that he will seek to pass the Volcker Rule (i.e. banning banks from proprietary trading and owning, investing in or sponsoring hedge funds)I feel that Washington has finally woken up to the risks posed by finance. Whether it was the election loss (in MA) that caused this or not does not matter. The fact is that the Administration is seeking to seperate a highly regulated banking sector from a completely non-regulated hedge-fund sector. Let's hope that Congress passes it. If it does, I think the positive impact on financial and real economy stability, and even on wealth and income inequality, will be profound and long-lasting.