Video of the Week: On Tuesday’s PBS NewsHour
, Dennis Kelleher debated the Volcker Rule and the need to change Wall Street’s risk-taking culture with an American Bankers Association representative.
Better Markets’ Dennis Kelleher and ABA’s Wayne Abernathy on PBS NewsHour: “Will the Volcker Rule change the culture of Wall Street?”
Stop high-frequency traders from destabilizing U.S. markets.
In an effort to reduce the risks that computer-generated trading poses to markets and investors, the CFTC in September issued a concept release on possible regulation of high-frequency trading
. HFT, the term for buying and selling stocks in milliseconds using high speed, complex computer programs, is the unregulated “Wild West” of the financial markets. Several HFT-related trading disasters and near-disasters have in recent years caused turmoil and massive losses in the markets. For example, in 2012, when a Knight Capital trading program ran amok
, turning 212 customer stock orders into more than 4 million stock orders, causing more than $4 billion in losses, and ultimately leading to the distressed sale of Knight itself. High-frequency traders destabilize U.S. markets, drain the wealth of investors and destroy public and investor confidence in the markets. Better Markets recently submitted a comment letter calling on the CFTC to act now and implement sensible reforms before the next inevitable computer-driven market meltdown
. And HFT watchdog Themis Trading had this recent post referencing these issues
and some additional comments on the proposal.
New details emerge about JP Morgan’s reported alleged bribery practices in China.
The New York Times recently published new details about JP Morgan Chase’s “Sons and Daughters” program
for hiring the children of Chinese government and business leaders to obtain business deals. It was reported that JP Morgan hired the daughter of the Deputy Minister of Propaganda for the Communist Party, among others. If true, this would be bribery made illegal by a longstanding, well-known U.S. law called the Foreign Corrupt Practices Act. Dennis Kelleher discussed this on Bloomberg TV
, observing that allegations of JP Morgan’s “fairly systemic illegal conduct in China” is the latest example of “banks this sprawling throughout the world, they’re not just too big to fail and too big to jail, but they’re too big to manage.”
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