Banks Caught Hiding Their Debt Levels from Investors and You

The Wall Street Journal has reported that several large banks hid their risk levels for the last five quarters, according to the statistics from the Federal Reserve Bank of New York.

About 20 banks, including J.P. Morgan Chase & Co., Morgan Stanley, Goldman Sachs Group Inc, Citigroup Inc. and Bank of America Corp. hid the actual debt that they had taken for funding trading in securities. They used to temporarily lower their debts at the end of each quarter when banks have to publicly disclose their debt data and then they increased their debt levels again in the next quarter. [Read more…]

William Dudley Offers Advice on Combating Asset Bubbles

William C. Dudley, President of the Federal Reserve Bank of New York, recently offered some advice on the subject of formation of asset bubbles in the economy and what central banks can do to deal with it. The recent financial crisis highlighted how poor regulation made the financial system vulnerable and led to bubble formation. [Read more…]