Banks’ Exposures

Crossville TN

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Banks’ Exposures To Russia Are Much More Transparent Than Those Of Non-Banks Mayra Rodriguez ValladaresSenior Contributor Mar 12, 2022,03:46pm EST Remember Long Term Capital Management and AIG? I sure do. LTCM imploded in 1998, in large part, because of its investments in Russian treasuries and other emerging market securities. In 2008, AIG Russia almost declared bankruptcy because a unit in London, that barely anyone knew about, was selling protection, through credit default swaps, to banks who were protecting against defaults on securitizations. Why does this walk down memory lane matter? Because here we are in 2022, and sadly, we are still in a situation where there is tremendous opacity in the global financial system. If it were just rich investors losing money, the vast amount of the global population would hardly lose sleep. However, when financial institutions lose money, they invariably impact unsuspecting citizens. William McDonough FRBNY President and my former boss, William McDonough (R), and Federal Reserve Chairman Alan Greenspan. Multiple international standard setters such as the Financial Stability Board and the Bank for International Settlements have "long warned" that Other Financial Institutions (OFIs), also known as "non-banks and shadow financial institutions", need to be regulated and supervised. Many of them are "not". Yes, the largest ones are often publicly traded, so they have financial disclosures, but that does "not" mean that they are supervised and examined with a "risk based supervisory" approach in the manner that banks and insurance companies are.