Wednesday, October 19, 2016

The European Union Is A "House Of Cards"
"One day, the house of cards will collapse .. Realistically, it will be a case of muddling through, struggling from one crisis to the next. It is difficult to forecast how long this will continue for, but it cannot go on endlessly, An exit from the QE policy is more and more difficult, as the consequences potentially could be disastrous .. The decline in the quality of eligible collateral is a grave problem. The ECB is now buying corporate bonds that are close to junk, and the haircuts can barely deal with a one-notch credit downgrade. The reputational risk of such actions by a central bank would have been unthinkable in the past.”
- Professor Otmar Issing, the ECB’s first chief economist
LINK HERE to the article

1 comment:

Anonymous said...

Tue Oct 18, 2016 | 5:43 PM EDT
CFTC regulator oversaw compliance at firm accused of illegal trades

By Sarah N. Lynch | WASHINGTON

A U.S. Commodity Futures Trading Commission senior regulator is being thrust into the spotlight after the agency fined her former employer for a supervisory breakdown over illegal wash trades that primarily occurred on her watch.

The commission's Sept. 28 civil case against Newedge USA LLC, now fully owned by Societe Generale, makes no mention of Eileen Flaherty, who heads up the agency's office that oversees rules governing chief compliance officers at brokerage firms, among other things.

Before Flaherty joined the CFTC in July 2015 as director of the Division of Swap Dealer and Intermediary Oversight, she was the global head of Compliance and Financial Crime Prevention for Newedge from mid-2011 through the end of 2014

Flaherty, who has been recused from handling or commenting on matters involving Newedge, declined to comment, CFTC spokesman Steve Adamske said in an emailed statement.

Adamske said the CFTC routinely hires people with industry expertise, and that Flaherty had complied with all government ethics rules, noting that she was recused from reviewing the case when it was sent to her division for input.

A spokesman for Societe Generale declined to comment on Flaherty's role in connection with the case, but said in an email that the firm was pleased to have resolved the matter.

The case has raised eyebrows among some commission staffers, who questioned whether Flaherty did her job properly at Newedge, and whether she was fit for her current role, several people told Reuters, asking not to be named because they were not authorized to speak with the media.

CFTC Chairman Timothy Massad extended Flaherty's employment contract for another year in August, about a month before the case became public, internal records show.

A major concern about federal government operations involve the "revolving door" through which executives in regulated industries get jobs to regulate their former employers.

However, experts have said that this case is particularly interesting because the settlement with the firm was announced while the former employee still works for the government.