30/11/17: Efficiency of Enforcement vs Volume of Regulation

Yesterday, in our class on Economics, we talked about the distinction between regulation (volume of rules) and efficient enforcement (monitoring, investigatory, enforcement and pre-emptive functions of regulatory authorities). As an example, we referenced the repeated chain of customer-level scandals at the Wells Fargo Bank.
Here is the latest scandal, unveiled earlier this week that I mentioned:
From our stand point, this case is really pushing the gap between regulation and enforcement out into new widths. Previous scandals, e.g. false accounts being created by bank employees, were harder to detect, pre-emptively, from regulatory point of view. The latest one was out in plain view for any supervisor/regulator to spot.

This post was published at True Economics on Thursday, November 30, 2017.

Time Warner Tumbles After AT&T CFO Questions Timing Of Deal

AT&T stock is rallying and Time Warner is falling following remarks by AT&T’s CFO John Stephens regarding “uncertainty” about the timing of the deal between the two companies, citing ongoing DoJ discussions. AT&T stock is rallying and Time Warner is falling following remarks by AT&T’s CFO John Stephens regarding “uncertainty” about the timing of the deal between the two companies, citing ongoing DoJ discussions.
As the WSJ reports, John Stephens, AT&T’s chief financial officer, said Wednesday at a New York investor conference hosted by Wells Fargo that the timing of the transaction was ‘now uncertain’ whereas just a few weeks ago, he told investors the company still expected the transaction to close later this year. Stephens didn’t say anything Wednesday to suggest the deal won’t be approved but pulled back from that earlier guidance.

This post was published at Zero Hedge on Nov 8, 2017.

Wells Fargo Claws Back Additional $72 Million From John Stumpf, Former Retail Banking Head

It’s been a bad start to the week for bank CEOs and ex-CEOs.
Hours after Barclays chief executive Jes Staley was slammed with a regulatory probe and learned he would see substantial cuts to his compensation after he tried to “unmask” a whistleblower, the board of Wells Fargo said it has clawed back an additional $72 million of pay from the two former execs it holds responsible for last year’s biggest banking scandal, namely the bank’s unprecedented cross-selling practices which went on for years, and which, too, resulted in numerous whistleblowers being silenced.
According to a 113-page board committee report released on Monday, directors of the bank decided to hold back more pay than disclosed last year from ex-CEO John Stumpf and former retail bank leader Carrie Tolstedt, who departed the bank shortly before the scandal brke out. Among the reasons, as summarized by the WSJ, “the board felt misled about the extent of sales abuses that went back to 2002 and resulted in a $185 million fine and two congressional inquiries.”
In its report, the board said as of last Friday, it decided to claw back from Mr. Stumpf an additional $28 million of incentive compensation paid in March 2016 under an equity grant made in 2013. In September it announced $41 million in clawbacks from Mr. Stumpf.
The board is also clawing back Ms. Tolstedt’s outstanding stock options worth about $47.3 million, following $19 million in earlier clawback activity. That brings total clawbacks to $183 million, according to the board report. That is one of the largest company clawbacks in recent history.

This post was published at Zero Hedge on Apr 10, 2017.

The Federal Reserve Explained in 7 Minutes

Is the Federal Reserve a government institution? How and when was this central bank of the United States formed? Why are US citizens forced to divulge all their financial information under penalty of law, yet that of the Federal Reserve remains veiled? The following short video sheds light on this otherwise dark banking enigma.

For more information on this shady outfit, read this brief article on exactly how the Federal Reserve System works. And see a simple, illustrated example of the subtle fleecing of the US currency system since the Fed’s inception.