Comments on: Liquidity Risk Disclosure Could be a Game-Changer http://tcbblogs.org/governance/2010/02/26/liquidity-risk-disclosure-could-be-a-game-changer/ Fri, 20 Apr 2012 13:57:34 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Lavone Lieb http://tcbblogs.org/governance/2010/02/26/liquidity-risk-disclosure-could-be-a-game-changer/#comment-1048 Lavone Lieb Wed, 31 Mar 2010 16:55:13 +0000 http://tcbblogs.org/governance/?p=374#comment-1048 Excellent post. Excellent post.

]]> By: Gary Larkin http://tcbblogs.org/governance/2010/02/26/liquidity-risk-disclosure-could-be-a-game-changer/#comment-802 Gary Larkin Mon, 01 Mar 2010 19:31:34 +0000 http://tcbblogs.org/governance/?p=374#comment-802 Bill Adams says: Enjoyed your post on liquidity risk disclosure. It's a pet issue of mine. (I wrote an article on Chinese bank counter-party risks in 2008. But I think the quote you cite about the tax on non-deposit liabilities driving up the cost of short-term financing by commercial paper, etc., may be a little one-sided. Financing costs for non-financial corporations in 2006 might have been higher if the tax had been in place then. But financing costs in 2008 might have been lower, since the tax would have encouraged banks to be less leveraged and so better insulated against a financial crisis. Long-term, it's very hard to say if the gains from the financial crisis averted would be larger than the losses from higher financing costs between crises. Economists have a hard time measuring gains from stability vs. losses from efficiency. But the possibility seems worth mentioning to me. Bill Adams Resident Economist The Conference Board China Center for Economics and Business Bill Adams says: Enjoyed your post on liquidity risk disclosure. It’s a pet issue of mine. (I wrote an article on Chinese bank counter-party risks in 2008. But I think the quote you cite about the tax on non-deposit liabilities driving up the cost of short-term financing by commercial paper, etc., may be a little one-sided. Financing costs for non-financial corporations in 2006 might have been higher if the tax had been in place then. But financing costs in 2008 might have been lower, since the tax would have encouraged banks to be less leveraged and so better insulated against a financial crisis. Long-term, it’s very hard to say if the gains from the financial crisis averted would be larger than the losses from higher financing costs between crises. Economists have a hard time measuring gains from stability vs. losses from efficiency. But the possibility seems worth mentioning to me.

Bill Adams
Resident Economist
The Conference Board
China Center for Economics and Business

]]> By: Get Real http://tcbblogs.org/governance/2010/02/26/liquidity-risk-disclosure-could-be-a-game-changer/#comment-798 Get Real Sat, 27 Feb 2010 19:33:29 +0000 http://tcbblogs.org/governance/?p=374#comment-798 OK, let's not fool ourselves - the "financial crisis responsibility fee" has nothing to do with making sure the government is repaid TARP lending to the "largest financial institutions". Last I checked just about all of lartest financials have paid back everything already and with each pay-back and subsequent warrant sale the Treasury touts the positive rate of return it has made on each of those loans. Where the government is not going to get paid back is from the lending to AIG, GM and Chrysler. Last time I checked they are not banks and the last two are not financial institutions at all (lending arms notwithstanding). The financial crisis responsibility fee is a politically motivated, punitive tax, whose biggest impact is likely to be to reduce market transparency and liquidity. OK, let’s not fool ourselves – the “financial crisis responsibility fee” has nothing to do with making sure the government is repaid TARP lending to the “largest financial institutions”. Last I checked just about all of lartest financials have paid back everything already and with each pay-back and subsequent warrant sale the Treasury touts the positive rate of return it has made on each of those loans. Where the government is not going to get paid back is from the lending to AIG, GM and Chrysler. Last time I checked they are not banks and the last two are not financial institutions at all (lending arms notwithstanding). The financial crisis responsibility fee is a politically motivated, punitive tax, whose biggest impact is likely to be to reduce market transparency and liquidity.

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