September 29

By Roosevelt Institute |

daily-digest-150What you need to know to navigate today’s economic debate.

It’s Crunch Time: The Fight to Fix the Financial System Comes Down to This (WP)
The next couple of months will be crucial in determining the shape of the financial system for decades to come. And so far, the signs are not encouraging.

What Did We Really Learn from the Economic Crisis? (FT)
So far, all we have really done is change the decision-making body, while the causes and symptoms of the financial crisis remain unchecked, writes Emma Bonino.

SEC Weighs New Rules for Lending of Securities (WSJ)
SEC Chairman Mary Schapiro said she wants to shine a light on the “opaque market”, the first major step regulators have taken in the area in decades.

Rational Irrationality (NewYorker)
The real reason that capitalism is so crash-prone.

Return of the Old Ways of Thinking Threatens Recovery (FT)
Mohamed El-Erian warns investors have not yet accepted Mervyn King’s insight that the absolute levels of income, debt, wealth and unemployment, not just the rates of change, are what matters.

World Bank Chief Leery of More Fed Power (WP)
World Bank president, Robert Zoellick, Suggests treasury as prime financial regulator.

World Bank Head Sees Dollar’s Role Diminishing (NYT)
The president of the World Bank said that the dollar was likely to lose its favored position as the euro and the Chinese renminbi assume bigger roles.

More Help Coming To Clean Up Crisis (WP)
Obama administration to roll out two initiatives aimed at addressing state programs that help lower-income borrowers get affordable mortgages and an effort to cleanse financial firms of their toxic assets.

Wall Street Bonuses Poised to Rebound (CNN)
With the financial sector recovering, banks face a conundrum: big bonuses could spark a backlash, but small bonuses could cause top talent to flee.

Banker-Pay Limits May Hurt Most at Citigroup, Bank of America (BLM)
G20 standards barring bonus guarantees for a year and requiring deferred pay for top executives would take recruitment tools away from banks burdened by diminished share prices and damaged reputations.

FDIC Considers Calling for Bank Advances (FT)
Standing lowest since the peak of the savings and loan crisis, US banks will have to advance tens of billions of dollars to protect depositors at the FDIC under a proposal to be to be put forward by regulators.

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