The billionaire founder of investment firm Elliott Management was one of several investors who warned financial ministers in 2007 that a crack in the housing market could cause huge problems for the banking industry.
Banking was conceived in iniquity and born in sin.
Complexity and interconnectedness matter as much as size in assessing risk in banking.
The whole banking sector in Mexico was literally bankrupt. For whatever reason, instead of intervening in the sector or supporting the banks, the government expropriated them. We went through the very laborious period of selling the failing banks to the wealthy people of Mexico.
There are so many instances in banking where 'free' simply doesn't mean free, whether it's opaque overdraft charges or credit card providers that are quietly raising interest rates without customers noticing.
A higher IOER rate encourages banks to raise the interest rates they charge, putting upward pressure on market interest rates regardless of the level of reserves in the banking sector. While adjusting the IOER rate is an effective way to move market interest rates when reserves are plentiful, federal funds have generally traded below this rate.
War has generally had grave and fateful consequences for the American monetary and financial system. We have seen that the Revolutionary War occasioned a mass of depreciated fiat paper, worthless Continentals, a huge public debt, and the beginnings of central banking in the Bank of North America.
With customers' permission, fintech firms have increasingly turned to data aggregators to 'screen scrape' information from financial accounts. In such cases, data aggregators collect and store online banking logins and passwords provided by the bank's customers and use them to log directly into the customer's banking account.
As with so many sectors of the economy, technology is transforming the retail banking sector.
The fundamental problem with banks is what it's always been: they're in the business of banking, and banking, whether plain vanilla or incredibly sophisticated, is inherently risky.