A Quote by Henry Paulson
We have institutions that have been allowed to become too big to fail because we had all kinds of flaws in our financial infrastructure, in the whole way over-the-counter derivatives work.
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You can't have some institutions that are protected by the law, not allowed to fail, and not held to account, and all the other companies in America are allowed to fail. You can't have equal justice under law and too big to fail.
The use of a growing array of derivatives and the related application of more-sophisticated approaches to measuring and managing risk are key factors underpinning the greater resilience of our largest financial institutions... Derivatives have permitted the unbundling of financial risks.
Over and over again, financial experts and wonkish talking heads endeavor to explain these mysterious, 'toxic' financial instruments to us lay folk. Over and over, they ignobly fail, because we all know that no one understands credit default obligations and derivatives, except perhaps Mr. Buffett and the computers who created them.
The subprime disaster was a result of financial bombs - derivatives - exploding in financial institutions such as AIG and Lehman Brothers, as well as banks and financial institutions throughout the world.
For market discipline to constrain risk effectively, financial institutions must be allowed to fail. Under optimal financial regulatory and financial system infrastructures, such a failure would not threaten the overall system.
The global financial crisis is a great opportunity to showcase and propagate both causal and moral institutional analysis. The crisis shows major flaws in the way the US financial system is regulated and, more importantly, in our political system, which is essentially a bazaar of legalized bribery where financial institutions can buy themselves the governmental regulations they want, along with the regulators who routinely receive lucrative jobs in the industry whose oversight had formerly been their responsibility, the so-called revolving-door practice.
I spent my whole career thinking about risk, markets, infrastructure, and regulation. I had seen the financial crisis unfold, and I had seen the credit derivatives market get operationally ahead of itself, which resulted in systemic risk counterparty exposures. I began to believe that distributed ledgers had the capability to tackle that problem.
Where human lives are concerned, time is always short, yet the world has witnessed the vast resources that governments can draw upon to rescue financial institutions deemed 'too big to fail.'
There is a simple way of avoiding excess risk-taking by the managers of our financial institutions. It is to make it a crime ... had a crime for reckless management of a financial institution been on the books, Northern Rock and RBS would not have blown up.
We lost our way and allowed greed and excess to become the twin pillars of too much of the financial culture. We became a society utterly absorbed in consumption and dismissive of moderation.
Most governments want their citizens to be part of the financial system, to be productive citizens as a result of having access to be able to manage and move money in a seamless way. But the traditional financial services infrastructure is not designed to handle that because, predominantly, it's an expensive infrastructure.
The heart of the 2008 financial crisis was a coterie of reckless financial executives, working for too-big-to-fail financial companies, who were handsomely compensated for taking risks that almost ruined the economy when they failed.
When we think of globalization we are thinking in part of structures and institutions that have been developed over time and that have allowed us to become more interdependent and interrelated. But the development, the extraordinary development, of those structures and institutions has not fundamentally transformed our humanity. We are still those animals with fears and anxieties and insecurities in the face of death and dread and disappointment and disease.
I urge you to sin. But not against these itty-bitty religions, Christianity, Judaism, Islam, Hinduism, Buddhism-or their secular derivatives, Marxism, Maoism, Freudianism and Jungianism-whic h are all derivatives of the big religion of patriarchy. Sin against the infrastructure itself!
Inappropriate macro economic policies in some economies, characterised by [a] low savings rate and high consumption [and] failure of financial supervision and regulation to keep up with innovation which allowed financial derivatives to spread.
The few effective provisions of Dodd-Frank are masked by its many flaws - flaws that have been and will continue to be detrimental to the American economy and our financial future if not reversed.
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