The Great Disconnect
The Role of Risk in the Bank of America/Merrill Lynch Merger
Posted by Herb Addison, Leo M. Tilman, February 17th, 2009, 1:49pm
In addition to providing yet another testament to the pervasive lack of transparency in finance, the Bank of America/Merrill Lynch transaction has yet again demonstrated the profound disconnect between executive decisions and risk management.
Why Do We Need a “Bad Bank?”
The Importance of a Market for Distressed Assets
Posted by Herb Addison, Leo M. Tilman, February 17th, 2009, 1:45pm
The creation of some version of a “bad bank” remains an integral part of the Financial Stability Plan. Here is why re-establishing a market for toxic assets is as important as shoring up the banks’ capital.
On Dentists and Delusions
State Street and Merrill Lynch Losses Show the Lack of Transparency
Posted by Herb Addison, Leo M. Tilman, February 15th, 2009, 12:48pm
Some Wall Street executives have long likened their jobs to those of dentists who “tap” and “poke” at complex trades or esoteric holdings. Such outdated risk management tools tend to perpetuate delusions, leading to inevitable sad endings. State Street and Merrill Lynch are cases in point.
