Ana Palacio - Reinventing the World Bank, Again

With three nominees now in the running to become the World Bank’s next president – Nigerian Finance Minister Ngozi Okonjo-Iweala, former Colombian Finance Minister José Antonio Ocampo, and the United States’ nominee, Dartmouth College President Jim Yong Kim – this is the moment to step back and assess the Bank’s trajectory. Unless the Bank’s next president has a clear vision of the way ahead, and the gravitas to withstand the institution’s internal pressures, he or she will be swallowed up by its complex machinery and unwieldy processes.

Global attention has been focused on weighing the three candidates’ strengths and qualifications, particularly their economic and financial credentials. But the real challenge lies in providing direction for the World Bank that reflects the world as it is, and re-calibrating the Bank’s tools accordingly. Inevitably, the new course hinges in part on recognizing that economics and finance, while integral elements of all areas of the Bank’s activities, are no longer the institution’s main drivers.

Read More:

http://www.nationofchange.org/reinventing-world-bank-again-1334504841

Kevin Zeese - CRACKS IN THE PILLAR OF POWER: Top Financiers Expose Fissures Within the 1%

In recent weeks several big finance insiders have publicly exposed fault lines in the U.S. financial system. Their inside views are telling us that the corruption we see is real and, more importantly, those in the system know it.

Financiers that break from the corruption of gluttonous greed can become the conscience of a sector that seems to have no conscience. Let’s hope their courage is contagious and others follow their lead.  We need a revolt from inside big finance that will help radically transform finance from greed to generosity, from gluttony to moderation and from selfishness to community benevolence.

A thorough examination of the corruption of big finance came in a recent shareholder letter from Robert Wilmers, the Chairman and CEO of M&T Bank. He laments that “it is difficult, for one who has spent more than a generation in the field, to recall a time when banking as a profession has been publicly held in such persistently low esteem” noting that polls show “only a quarter of the American public expressed confidence in the integrity of bankers.”  He recognizes that this is something big finance has brought on itself: “Since 2002, the six largest banks have been hit by at least 207 separate fines, sanctions or legal awards totaling $47.8 billion. None of these banks had fewer than 22 infractions; in fact one had 39 across seven countries, on three different continents. 

Read More:

http://globalresearch.ca/index.php?context=va&aid=30279

Bill Black - The Silver Anniversary of the “Keating Five” Meeting – Citizens United’s Precursor

April 9, 2012 is the twenty-fifth anniversary of the most infamous savings and loan fraud, Charles Keating’s, successful use of five U.S. Senators to escape sanction for a massive violation of the law. The Senators were Alan Cranston (D. CA), Dennis DeConcini (D. AZ), John Glenn (D OH), John McCain (R. AZ), and Donald Riegle (D. MI). They became infamous as the “Keating Five.” I was one of four regulators who attended the April 9, 1987 meeting. I took the notes of the meeting, in transcript format, that were so detailed and accurate that the Senators testified that they were sure I had tape recorded the meeting. (The reality is that I owe my note taking abilities to Bill Valentine, my high school debate coach, and experience debating for the University of Michigan.)

Reviewing my (near) transcript of the April 9 offers a large number of important lessons that would have allowed us to avoid future crises. We suffered the crises because we ignored all the lessons about which approaches are criminogenic and which are successful. The transcript shows four things that work. First, we were apolitical as regulators. I worked closely in the same regional office with my three regulatory colleagues for years, but I do not know their political affiliation (if any). We went after the S&L frauds and their political cronies regardless of party. Second, we were vigorous and fearless enough as regulators that the frauds (e.g., Keating) feared us. Keating knew that despite his fearsome political power and reputation for trying to ruin his opponents we (the regional S&L regulators based in San Francisco) would never back off.

Read More:

http://www.nakedcapitalism.com/2012/04/bill-black-the-silver-anniversary-of-the-keating-five-meeting-citizens-uniteds-precursor.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

The $30 billion Social Security hack

Sometime last year computers at the U.S. Social Security Administration were hacked and the identities of millions of Americans were compromised. What, you didn’t hear about that?  Nobody did.

The extent of damage is only just now coming to light in the form of millions of false 2011 income tax returns filed in the names of people currently receiving Social Security benefits. That includes a very large number of elderly and disabled people who are ill-equipped to recognize or fight the problem. It’s an impact pervasive enough that the IRS now has a form just to deal with it: Form 14039: Identity Theft Affidavit, December 2011.

The Wall $treet Journal has a story about this problem specific to Puerto Rico, but the Journal fails to mention that this is a national problem — a $30+billion problem.

The story is going public now because tax season is upon us and there’s no way to keep it under wraps as people file their tax returns only to learn that a return under that name has already been filed with refunds paid electronically into a bank account now closed. The December date on that IRS Form 14039 shows the Treasury has been expecting this for awhile.

Read More:

http://www.cringely.com/2012/03/the-30-billion-hack/

Robert Greenwald - Top Ten Koch Facts

Everyone seems to be investigating Charles and David Koch lately, with exposés of their corrupt political behavior popping up in places like the New Yorker, AlterNet, ThinkProgress, and Brave New Foundation’s film Koch Brothers Exposed. Naturally, the billionaire brothers don’t like the attention, so they’re responding to it by smearing the activists and journalists. In theThey made me look like Emperor Palpatine. But who’s really representing the Dark Side here? The truth is that the billionaire brothers bankrolling the con

Accordingly, here are 10 facts that every American should know about who the Kochs are and what they’re doing to our country.

1. Koch Industries, which the brothers own, is one of the top ten polluters in the United States — which perhaps explains why the Kochs have given$60 million to climate denial groups between 1997 and 2010

Read More:

 http://blogs.alternet.org/speakeasy/2012/04/10/top-ten-koch-facts/

William D. Cohan - Why Are the Fed and SEC Keeping Wall Street’s Secrets?

Getting what should be public information about major Wall Street firms can be maddeningly difficult.

Bloomberg News discovered this in its ultimately successful effort to get information on the $1.2 trillion in “secret loans” the Fed doled out during the financial crisis. And I’ve had no small experience of it myself.

As I started each of my three books -- about Lazard Freres, Bear Stearns and Goldman Sachs Group Inc. (GS) -- I submitted Freedom of Information Act requests to the appropriate government agencies (the Securities Exchange Commission, the State Department and the Federal Reserve) to obtain whatever documents, memos and e-mails they had about these companies and their senior executives.

I was hoping to find, among other nuggets, details of enforcement actions, or settlements that were reached where the firms “neither admitted nor denied” guilt, or other documentary evidence of the coziness that has for too long existed between Wall Street and Washington.

Read More:

http://www.bloomberg.com/news/2012-04-01/why-are-the-fed-and-sec-keeping-wall-street-s-secrets-.html

Marshall Auerback - Goldman Sachs Takeaway: Fix Our Financial System or Get Ready for the Next Horrific Collapse

Greg Smith's mea culpa about Goldman should not come as a surprise to anybody who has a remote connection with the financial services industry. But to suggest that the allegations made by Mr. Smith are unique to Goldman's culture is ludicrous. They are symptomatic of a much broader problem embedded in Wall Street culture as a whole. Goldman's major sin was being more astute at exploiting this system than most of its competitors.

The toxic derivatives sold to what employees of Goldman derisively referred to as "muppet" clients (since when was being a "muppet" such a bad thing?) were certainly neither a trend unique to GS, nor was it a recent phenomenon. The truth is that this activity has been embedded in Goldman's culture since the days when Robert Rubin was co-CEO of the company and advocated GS taking proprietary positions (trading for its own account), even if it meant betting against their clients.

Goldman was a successful company and success tends to breed imitation. Eventually, everybody on Wall Street was doing the same shitty business. Goldman, for example, wazsn't the only one selling these toxic mortgage products, which helped to blow up the world's global economy in 2008, but they were smart enough to hedge them. 

Read More:

http://www.alternet.org/story/154568/goldman_sachs_takeaway%3A_fix_our_financial_system_or_get_ready_for_the_next_horrific_collapse

Robert Scheer - At Last, Some Decency on Wall Street

By the time you read this, the PR hacks of Goldman Sachs will be vigorously pressing their efforts to destroy the reputation of whistle-blower Greg Smith, a former Goldman executive director whose exposé in Wednesday’s New York Times Op-Ed page was so devastating that the 143-year-old firm might actually, finally, be held accountable.

Smith, a wunderkind who spent the 12 years after he graduated from Stanford University rising through the ranks at Goldman, has revealed the firm’s culture to be so fundamentally venal that were financial industry shenanigans not generally exempt from effective legal regulation, Goldman’s executives could have been rounded up Wednesday morning on organized-crime charges.

The law that exempted what would have been illegal trading in the murky derivatives that the Smith article denounced was the Commodity Futures Modernization Act, enthusiastically signed by Bill Clinton in the waning months of his administration. The legislation shielded from any regulatory law the very activities that led to the financial meltdown from which Americans are still reeling.

Read More:

http://www.truthdig.com/report/item/at_last_some_decency_on_wall_street_20120314/

Greg Smith - Why I Am Leaving Goldman Sachs

Today is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.

To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.

Read More:

http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?_r=1

Stephen Gandel - The Wall Street multibillion scandal no one is talking about

Much of the talk about bad behavior on Wall Street since the financial crisis has been about mortgages with a little bit of insider trading sprinkled in. And that makes sense. Everyone immediately understands what a mortgage is. And the housing bust that resulted from all those bad home loans affected us all. And Hollywood has taught us to ooh and ah over insider trading.

But there is another scandal that has come out of the financial crisis that at least to me makes the mortgage underwriting scandal look like small peanuts, and it has been heating up lately. Two weeks ago, the government disclosed that it is looking into bringing criminal cases against traders and banks that manipulated a key bank lending rate, called LIBOR. A source close to the case says the government's "may" will be dropped soon. Both Barclays and Deutsche Bank have disclosed that they have been the focus of investigations. Banks have suspended dozens of traders. Today, Credit Suisse announced that it was cooperating with regulators on the case. Traders at UBS reportedly are already working with the government on its investigation. Looking for instances in which Wall Streeters go to jail, unlike mortgages, this may be the one.

Read More:

http://finance.fortune.cnn.com/2012/03/23/the-wall-street-multibillion-scandal-no-one-is-talking-about/