The Federal Home Loan Banking system, a government-sponsored network of US banks, is seeking to enter the so-called “monoline” insurance market to help local governments that have been hurt by the credit market storm.Why not have them wrap structured finance too? I mean, what could possibly go wrong with pseudo public sector entities backed by taxpayers getting into an area of finance they have never been involved with before?
In particular, some banks in the network want to offer their top-notch credit ratings to municipal infrastructure projects – and thus fulfil the role traditionally taken by monoline insurance groups such as MBIA.
This is a blog about interacting systems and how they behave: systems thinking construed broadly. Financial markets and economics; politics; and occasionally physical systems are discussed, with an attempt at focusing on how the rules of the game determine the strategies of participants and the possible outcomes.
Friday, 28 March 2008
Bad idea of the year award
An easy winner, this. From the FT:
No comments:
Post a Comment