The Geithner Plan

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Via Felix Salmon, I see that Tim Geithner has unveiled his plan — or, more accurately, his guiding principles — for regulating leverage more effectively in the financial industry.  And it’s not bad.  Basically it requires (a) stronger capital requirements across the board; (b) higher capital requirements for bigger firms, which would make larger firms somewhat less profitable; (c) an emphasis on real capital, not shell games; (d) higher capital requirements in good times and lower requirements in bad times; (e) a simple leverage constraint as sort of a backup to the more complex main capital rules; (f) stronger regulation of off-balance-sheet vehicles; (g) some kind of minimum liquidity requirement so that banks can’t be wiped out in just a matter of days by a bank run; and (h) extension of all these rules to big non-banking entities (the “shadow banking” system).

All of these are described in general terms, and I note that (h) is described in especially dodgy terms.  So we won’t know how serious Geithner is about this stuff until he rolls out the details.  But at least he seems to singing the right songs.

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And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

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