13 Bankers: The Wall Street Takeover and the Next Financial Meltdown (54 page)

25.
Edward M. Gramlich,
Subprime Mortgages: America’s Latest Boom and Bust
(Washington: Urban Institute Press, 2007), 19.

26.
Interview with Shailesh Mehta,
Frontline,
July 7, 2009, available at
http://www.pbs.org/wgbh/pages/frontline/creditcards/interviews/mehta
.html
.

27.
Elizabeth Warren, “Unsafe at Any Rate,”
Democracy: A Journal of Ideas,
Summer 2007, available at
http://www.democracyjournal.org/article.php?ID=6528
.

28.
Department of the Treasury,
Financial Regulatory Reform, supra
note 9, at 67–68.

29.
Peter J. Wallison, “Elitist Protection Consumers Don’t Need,”
The Washington Post,
July 13, 2009, available at
http://www.washingtonpost.com/wp-dyn/content/article/2009/07/12/AR2009071201663.html
. See also James Kwak, “The AEI Versus the Real World,”
The Baseline Scenario,
July 15, 2009, available at
http://baselinescenario.com/2009/07/15/consumer-financial-protection-peter-wallison/
.

30.
See, e.g., R. Michael S. Menzies, Sr., “Testimony on Behalf of the Independent Community Bankers of America Before the House Financial Services Committee,” July 15, 2009, available at
http://www.icba.org/files/ICBASites/PDFs/test071509.pdf
.

31.
Stephen Labaton, “Regulators Spar for Turf in Financial Overhaul,”
The New York Times,
July 24, 2009, available at
http://www.nytimes.com/2009/07/25/business/economy/25regulate.html
.

32.
Kevin Drawbaugh, “Rep. Frank Extracts Vanilla from Consumer Agency,” Reuters, September 22, 2009, available at
http://www.reuters.com/article/wtUSInvestingNews/idUSTRE58L6YR
20090922
.

33.
Charles Duhigg and Carter Dougherty, “From Midwest to M.T.A., Pain from Global Gamble,”
The New York Times,
November 1, 2008, available at
http://www.nytimes.com/2008/11/02/business/02global.html
; Tavakoli was quoted in the article.

34.
Jamie Dimon, “No More ‘Too Big to Fail,’ ”
The Washington Post,
November 13, 2009, available at
http://www.washingtonpost.com/wp-dyn/content/article/2009/11/12/AR2009111209924.html
.

35.
Gary H. Stern and Ron J. Feldman,
Too Big to Fail: The Hazards of Bank Bailouts
(Washington: Brookings Institution Press, 2009).

36.
Andrew Ross Sorkin,
Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and Themselves
(New York: Viking, 2009), 236.

37.
On the race to save Morgan Stanley and Goldman Sachs, see ibid. at 409–83.

38.
See, e.g., Paul Krugman, “Too Big to Fail FAIL,” The Conscience of a Liberal Blog,
The New York Times,
June 18, 2009, available at
http://krugman.blogs.nytimes.com/2009/06/18/too-big-to-fail-fail/
.

39.
See, e.g., Ben Bernanke, “Financial Regulation and Supervision After the Crisis: The Role of the Federal Reserve” (lecture, Federal Reserve Bank of Boston 54th Economic Conference, Chatham, MA, October 23, 2009), available at
http://www.federalreserve.gov/newsevents/speech/bernanke20091023a
.htm
.

40.
See, e.g., Department of the Treasury,
Financial Regulatory Reform, supra
note 9.

41.
Larry Summers, “International Financial Crises: Causes, Prevention, and Cures,”
The American Economic Review Papers and Proceedings
90 (2000): 1–16.

42.
Piergiorgio Alessandri and Andrew G. Haldane, “Banking on the State,”
BIS Review
139/2009, available at
http://www.bis.org/review/r091111e.pdf
.

43.
Dean Baker and Travis McArthur, “The Value of the ‘Too Big to Fail’ Big Bank Subsidy,” Center for Economic and Policy Research Issue Brief, September 2009, available at
http://www.cepr.net/documents/publications/too-big-to-fail-2009–09.pdf
.

44.
See Department of the Treasury,
Financial Regulatory Reform, supra
note 9, at Part IV.A.

45.
Department of the Treasury,
Principles for Reforming the U.S. and International Regulatory Capital Framework for Banking Firms,
September 3, 2009, available at
http://www.treas.gov/press/releases/docs/capital-statement_090309.pdf
.

46.
See, e.g., Thomas Hoenig, “Troubled Banks Must Be Allowed a Way to Fail,”
Financial Times,
May 3, 2009, available at
http://www.ft.com/cms/s/0/46e2f784–380b-11de-9211–00144feabdc0.html
.

47.
Gillian Tett, “The Sweet Fix of CoCos?,”
Financial Times,
November 12, 2009, available at
http://www.ft.com/cms/s/0/797f2cb6-cfb5–11de-a36d-00144feabdc0.html
; Gillian Tett,
Saving the Sun: How Wall Street Mavericks Shook Up Japan’s Financial World and Made Billions
(New York: HarperCollins, 2003).

48.
Lehman Brothers, “Q3 2008 Guidance Call,” September 10, 2008, transcript available at
http://www.scribd.com/doc/13231363/Lehman-Transcript
.

49.
Shannon D. Harrington and Neil Unmack, “Lehman Credit-Swap Auction Sets Payout of 91.38 Cents,” Bloomberg, October 10, 2008, available at
http://www.bloomberg.com/apps/news?pid=20601087&sid=aLkOZnNcDmSQ
.

50.
Research Report, Morgan Stanley, “Banking—Large and Midcap Banks: Bid for Growth Caps Capital Ask,” November 17, 2009.

51.
According to the proposal of the Treasury Department. Department of the Treasury,
Financial Regulatory Reform, supra
note 9, at Part IV.A.

52.
See, e.g., Aaron Kiersch, “JPMorgan CEO Jamie Dimon Donates Serious Cash to Democrats,”
OpenSecrets.org,
July 21, 2009, available at
http://www.opensecrets.org/news/2009/07/jpmorgan-ceo-jamie-dimon-donat.html
.

53.
See Adam Levitin, “Too-Big-to-Fail Resolution: Why One Size Can’t Fit All,”
Credit Slips,
October 25, 2009, available at
http://www.creditslips.org/creditslips/2009/10/toobigtofail-resolution-why-one-size-cant-fit-all.html
.

54.
Dimon, “No More ‘Too Big to Fail,’ ”
supra
note 34.

55.
Quoted in Christine Harper, “Blankfein Defends Goldman Sachs Against Breakup,” Bloomberg, November 10, 2009, available at
http://www.bloomberg.com/apps/news?pid=20601087&sid=ap5t.QjB.veg
.

56.
Quoted in Alex Blumberg, “Rewriting the Rules of the Financial System,” NPR, October 9, 2009, available at
http://www.npr.org/templates/story/story.php?storyId=113650178
.

57.
Quoted in Eric Dash, “If It’s Too Big to Fail, Is It Too Big to Exist?,”
The New York Times,
June 20, 2009, available at
http://www.nytimes.com/2009/06/21/weekinreview/21dash.html
.

58.
Joseph Stiglitz, “Too Big to Fail or Too Big to Save? Examining the Systemic Threats of Large Financial Institutions,” Statement Before the Joint Economic Committee, April 21, 2009, available at
http://jec.senate.gov/index.cfm?FuseAction=Hearings.HearingsCalendar&ContentRecord_id=c89b185b-
5056–8059–7670–0ce56df64713&Region_id=&Issue_id=
. At the same hearing, Simon Johnson said, “[T]he advice from those with experience in severe banking crises would be just as simple: break the oligarchy. In the U.S., this means breaking up the oversized institutions that have a disproportionate influence on public policy.” Simon Johnson, “Too Big to Fail or Too Big to Save? Examining the Systemic Threats of Large Financial Institutions,” Statement Before the Joint Economic Committee, April 21, 2009, available at the same URL.

59.
Paul Volcker, Statement Before the Committee on Banking and Financial Services,
supra
note 1.

60.
Louis Uchitelle, “Volcker Fails to Sell a Bank Strategy,”
The New York Times,
October 20, 2009, available at
http://www.nytimes.com/2009/10/21/business/21volcker.html
.

61.
Mervyn King (lecture to Scottish business organizations, Edinburgh, Scotland, October 20, 2009), available at
http://www.bankofengland.co.uk/publications/speeches/2009/speech406
.pdf
.

62.
John Kay,
Narrow Banking: The Reform of Banking Regulation
(London: Centre for the Study of Financial Innovation, 2009).

63.
Laurence J. Kotlikoff,
Jimmy Stewart Is Dead: Ending the World’s Financial Plague Before It Strikes Again
(Hoboken, NJ: Wiley, 2010).

64.
Richard W. Fisher, “Paradise Lost: Addressing ‘Too Big to Fail’ (With Reference to John Milton and Irving Kristol)” (lecture, Cato Institute’s 27th Annual Monetary Conference, Washington, D.C., November 19, 2009).

65.
Alan Greenspan, “The Global Financial Crisis: Causes and Consequences” (lecture, C. Peter McColough Series on International Economics, Council on Foreign Relations, October 15, 2009), available at
http://www.cfr.org/publication/20417/
.

66.
Dimon, “No More ‘Too Big to Fail,’ ”
supra
note 34; Scott Talbott of the Financial Services Roundtable, recorded during a panel discussion of the Pew Charitable Trusts, “Planet Money Live,”
Planet Money,
September 14, 2009, available at
http://www.npr.org/blogs/money/2009/09/podcast_planet_money_live
.html
; Charles Calomiris, “In the World of Banks, Bigger Can Be Better,”
The Wall Street Journal,
October 19, 2009, available at
http://online.wsj.com/article/
SB10001424052748704500604574483222678425130.html
.

67.
From 424(b)(5) filings with the SEC, dated June 18, 2008, available at
http://sec.gov/Archives/edgar/data/200406/000095012308007069/
y60660b5e424b5.htm
, and October 30, 2007, available at
http://sec.gov/Archives/edgar/data/
200406/000095012307014699/y41496b5e424b5.htm
.

68.
Dean Amel, Colleen Barnes, Fabio Panetta, and Carmelo Salleo, “Consolidation and Efficiency in the Financial Sector: A Review of the International Evidence,”
Journal of Banking and Finance
28 (2004): 2493–2519. See also Stephen A. Rhoades, “A Summary of Merger Performance Studies in Banking, 1980–93, and an Assessment of the ‘Operating Performance’ and ‘Event Study’ Methodologies,” Federal Reserve Board Staff Studies 167, summarized in
Federal Reserve Bulletin,
July 1994, complete paper available at
http://www.federalreserve.gov/Pubs/staffstudies/1990–99/ss167.pdf
: “In general, despite substantial diversity among the nineteen operating performance studies, the findings point strongly to a lack of improvement in efficiency or profitability as a result of bank mergers, and these findings are robust both within and across studies and over time.” See also Allen N. Berger and David B. Humphrey, “Bank Scale Economies, Mergers, Concentration, and Efficiency: The U.S. Experience,” Wharton Financial Institutions Center Working Paper 94–24, 1994, available at
http://fic.wharton.upenn.edu/fic/
papers/94/9425.pdf
.