[REBORN FROM THE ASHES][comment][01.23]

qxn_1987UID: 2610437

Comments:

To be honest, this passage is so abstract to me. I can not understand it clearly, as a matter of fact, so I just write something might not relative to the thesis of this article, since which I am not familiar with. We have just experience financial crisis which is no denying that have influence all the world so deeply and widely, and the economy is recoverying from it gradually day by day. Amid the recoverying, we also should not deny that something is changing delicately and potentially, as well some strategies, perspectives, or structures are changing as well. In the meantime, we begin to be more circumspect about investment carries more risks.

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structure
strategy

jilinlinUID: 2396929

It is a quite difficult article for me in that I am not familiar with economy and it is full of new words. This is an essay with brief analysis of the cause of the bygone financial crises and potential solving policies.

Comments: 01.23
      Although banks have been bailed out by government’s financial rescue, the fundamental problems have not yet been solved in the US. The implicit blanket guarantee of banks’ all liabilities makes much subsidy go to bank staff instead of clients. And the examples of the mortgage agencies Fannie Mae and Freddie Mac show that guarantee is also dangerous because those firms with subsidized funding lack risk of failure, and capital is probably misallocated and dysfunctional consequentially.
      To enhance the financial safety, the Basel club rewrite its rules on capital and liquidity which is said to be too moderate. The newspaper supports to add a liability levy on banks’ debt. And in long run what is needed is a way to create the halfway house of partial bankruptcy; or to give agency powers to deal with bad banks just like impose losses over part of a bank’s balance-sheet.
      By and large, since public backing of finance have reached unacceptable levels, the Obama administation must implement some potent policies to solve the banking problems.

domudomuUID: 2670967

IT IS bonus season again. Bankers get bashed（猛击，重击） and governments inventways to tax them, most recently Barack Obama’s plan to charge banks anannual insurance fee. Amid all the rancour( 深仇怨恨）(see article),some say it is important to regain a sense of perspective. Banks have been bailed out throughout history. People hate it, but they would hatet he devastation（破坏） that a collapse would bring even more. Besides,finance’s wild-west era is over. The Basel club of regulators is tightening its rules and there is talk of new curbs（限制） on proprietary trading.
（在这个金融时代，银行又造重创，政治体系也子啊改善）
Problem solved, then? Unfortunately not. The pact between societyand banks has changed dramatically over the years. Once, banks got liquidity（流动资金） support from a lender of last resort. In the 20th century they got state-backed（国家支持） deposit-guarantee schemes(存款担保体系）. And now they enjoy an implicit blanket guarantee of all their liabilities, allowing them to borrow cheaply. All this has let the industry operate with smaller safety buffers than in the past, and balloon in size. Relative to the size of the economy, Britain’s banks are ten times larger than in 1970.
（问题并未解决，银行的支柱已不再强硬，现在工厂都比以前贷款方便）

That blanket guarantee is unfair. Some of the subsidy（补贴） is passed onto banks’ customers, but much goes to their staff. It may be unsustainable（不能被证实的）: the assets of America’s banks are now as big as its GDP,taxpayers in most rich countries are underwriting systems several times larger than their economies, and it is unclear whether tiny Iceland will honour its commitments. The guarantee is also dangerous. As any capitalist knows, firms with subsidised（给津贴，补贴） funding and no risk of failure usually misal locate capital and can be dysfunctional, as the mortgageagencies Fannie Mae and Freddie Mac demonstrate.
（大多补贴是被员工不公开的拿走的，而公司的津贴条件越来越好）
The Basel club is making a decent fist（拳，握紧） of rewriting its rules on capital and liquidity, forcing the banks to operate with larger safety buffers. But regulators must be brutally（残忍的） honest about what these reforms will achieve. The banking system is only as strong as its weakest links, and even the new, bigger buffers would not have been enough to prevent the worst blow-ups of the past two years (see article).That is understandable: banks’ capital would need to double to deal with the risk that they might be the next Merrill Lynch or UBS. Passing the cost of that on to customers could hurt the economy.
（要改革了，看起来过程还蛮纠结的）

If the state is thus doomed to （注定的）bail out（保释） tomorrow’s basket cases, it should charge for the guarantee banks get. One option, which Mr Obama has proposed and which this newspaper has supported, is a “liability levy（义务，倾向）” on banks’ debt to recoup（重获，补偿偿还） the subsidy they get from artificially low borrowing costs. Banks already pay a similar levy on their insured deposits（放置，沉淀）; a liability levy would hit investment banks, too. It should help to rein（控制，统治） in bonuses somewhat, and could fund a bail-out kitty. Sucha levy addresses some of the problems that arise from the blanketguarantee, but in the long run it would be best to withdraw it. That will not be easy. Banks’ creditors must suffer losses if taxpayers are to avoid bail-outs. Yet if all creditors and counterparties fear loss,they will run from a weak bank, creating a self-fulfilling prophecy（预言）.What is needed is a way to create the halfway house of partial bankruptcy.
（一些拯救方案出台）

Building a half-way houseOne option is for banks to issue so-called “Coco” bonds that convert into equity if capital gets too low, although no one really knows how such instruments would behave in a crisis. Another is to give a resolution agency powers to deal with bad banks. This agency cannot bejust a glorified（赞美，荣耀） contingency（偶发性） planner, but it cannot be a despot （专制）either,otherwise terrified creditors and counterparties will run if intervention seems likely. It needs absolute authority to impose losses（对亏损）, but over only part of a bank’s balance-sheet. This wouldrequire banks to ring-fence the bits worth saving (such as retaildeposits), or force them to carry debt that gets a mandatory haircut ifthe state has to step in. All big banks would have an implicitguarantee, but it would not cover their entire balance-sheets.


It is all too easy to pretend that new capital and liquidity bufferswill be enough to prevent the need for future bail-outs, but it isunlikely to be the case. Devising a way to impose controlled losses onfailed banks’ creditors, and convincing markets that it really will beused next time there is a crisis, will be difficult. But anyone with asense of perspective can only conclude that public backing of financehas reached unacceptable levels. Solving that problem must beregulators’ priority.

prettywraithUID: 197049

Comments (2010-01-23):
Another essay related with finance, it is one of my favorites. About Barack Obama's new  plan stirs up a fierce debate in American, while the Dow Jones Indexes lost/fell 5 percent in two days. Investors, who afraid the profit decline of banks, sell out numerous financial stocks. Perhaps, the Wall Street's leaders actively attack the stock market to express their angry for the new policies. As author's assertion, indeed, it is unfair that government bailed out banks with taxpayers' money, while those banks pay their high level managers and employees with generous bonus. But, is Mr. Obama's plan effective to reform the financial system health? Author insists building a half-way house is better way to solve the current problem. Honestly, I do not understand the half-way house clearly in the passage. But, I concede Mr. Obama's new policies would be not valid as expect, and he might need a revision.

Wrong Spelling：
Financial  finacial