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Home / Tag Archives: Risk and risk management

Tag Archives: Risk and risk management

The Two Sides of Government Guarantees for Banks

By Taneli Mäkinen, Advisor, DG for Economics, Statistics and Research, Bank of Italy, Lucio Sarno, Professor of Finance, Cass Business School, City, University of London, and Gabriele Zinna, Advisor, DG for Economics, Statistics and Research, Bank of Italy. Originally published at VoxEU During the recent financial crises, government helped reduce the funding costs of banks by providing them with insurance, thus curbing panic in banking systems and financial markets. This column argues,...

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Gregory Travis and Marshall Auerback: Anatomy of a Disaster – Why Boeing Should Never Make Another Airplane, Again

Yves here. Even thought this critique of Boeing might seem a bit….bloodthirsty…Boeing does have blood on its hands and has been astonishingly unrepentant about it. Given the fact that Boeing is part of a duopoly of makers of large planes, and there is no plausible way that Airbus could take up the new orders slack, predictions of its demise would seem to be premature. But AIG was widely viewed as indomitable until it started its nosedive. Another way to return Boeing to the community of...

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How Deep Is Boeing’s Hole?

Due to time constraints, I’m going to deal with the current state of Boeing’s woes in broader strokes than usual, and I hope readers will chime in with details, calibration, and any quibbles or corrections. The latest stories are not pretty: Boeing new sales have collapsed. However, no one has cancelled orders but new orders have stalled. From CNN: Boeing had no new orders for planes in April. Not only did the troubled 737 Max receive zero new orders since it was grounded March 13. Boeing’s...

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SEC to Relax Audit Requirements for Small Companies, Thus Facilitating Future Accounting Fraud

By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans. The Securities and Exchange Commission (SEC) voted last week 3-1 to exempt small public companies – with annual revenues of less than $100 million – from the requirement that an independent outside auditor attest to the adequacy of the company’s internal control auditing provisions, as required by the Sarbanes Oxley Act of 2002 (SOX). The proposal is...

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The Next US Recession Is Likely to Be Around the Corner

Lambert here: “Don’t look back. Something might be gaining on you.” –Satchel Paige By Franck Portier, Professor, University College London and CEPR Research Fellow. Originally published at VoxEU. Business economists argue that the length of an expansion is a good indicator of when a recession will hit. Using both parametric and non-parametric measures, this column finds strong support for the theory from post-WWII data on the US economy. The findings suggest there is good reason to expect a...

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Yes, the Tech Giants Are a Big Problem—But the Untamed Finance Industry Could Still Blow Up the Economy

Yves here. To add to Marshall’s tally of ticking time bombs in finance-land: another source of systemic risk is central counterparties for derivatives. They were supposed to reduce risk by shifting clearing and settlement of many types of derivatives out of banks and over to entities that would be well capitalized and at arm’s length to the banks. We’ve written how the central counterparties are new TBTF entities, since charging high enough margin and other loss reserves to provide for enough...

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Ralph Nader Calls Out Boeing for 737 MAX Lack of Airworthiness, Stock Buybacks, and Demands Muilenburg Resign

By Lambert Strether of Corrente. Ralph Nader has published an open letter to Dennis A. Muilenburg, current CEO of Boeing, which is worth reading in full. There’s a personal connection: [Nader’s] niece, 24-year-old Samya Stumo, was among the 157 victims of an Ethiopian Airlines flight crash last month, less than six months after a flight on the same aircraft, the Boeing 737 Max 8, crashed in Indonesia. Nader comments, in Stumo’s obituary in the Berkshire Eagle: “She was compassionate from the...

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The Effectiveness of the Global Financial Safety Net Depends on the Tools and Shocks

By Beatrice Scheubel, Economist, Directorate General International and European Relations, ECB, Livio Stracca, Deputy Director General International and European Relations, ECB, and Cédric Tille, Professor of Economics, Graduate Institute, Geneva and CEPR Research Fellow. Originally published at VoxEU. More than ten years on from the start of the Global Crisis, policymakers are discussing the effectiveness of the global financial safety net – the combination of reserves, central bank swap...

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Boeing’s 737 Max Debacle: The Result of a Dangerously Pro-Automation Design Philosophy?

The aftermath of two crashes of Boeing 737 Max jets shortly after takeoff has led to the global grounding of the airplane. Boeing has been forced to cut production, and even so, undelivered planes are piling up. Big buyers like Southwest American Airlines have been forced to cancel flights during their peak time of year as a result of taking their 737s off line. American lengthened its 737 grounding to June 5 and Southwest, to August 5. Even though Boeing is scrambling to fix the software...

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Climate Research Must Change to Help Communities Plan for the Future

By Robert Koop, Professor, Department of Earth & Planetary Sciences, and Director, Rutgers Institute of Earth, Ocean, and Atmospheric Sciences, Rutgers University. Originally published at The Conversation Climate change is a chronic challenge – it is here now, and will be with us throughout this century and beyond. As the U.S. government’s National Climate Assessment report made clear, it’s already affecting people throughout the United States and around the world. Warmer temperatures are...

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