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Paul Barrett, Assistant Managing Editor of Business Week says the year 2009 will represent a year of lost opportunity to reform the financial system. The Obama administration and Congress did not have the courage to do what is needed, and did not take Paul Volcker's advice on the danger of ahandful of banking institutions controllig a major portion of global banking assets. The WSJ reported that the world's 10 biggest banks account for about 70% of global banking assets, up from 59% before the crisis. It is ayear he says of missed opportunities and little was done in so many areas, including derivatives regulation and the credit rating agencies continue doing business as before with clear conflict of interest inherent in their practices. Barrett says genuine reform fizzled, and we will regret it. The Obama administration and Congress let themselves be influenced by the banking lobbyists and bankers, just as they allowed genuine health reform opportunities to slip in 2009.

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The Bernanke Fed's decision on Sept. 16, 2013 to continue the pace of bond purchases is seen with relief in emerging markets and taken positively by equity markets worldwide. The Fed's decision is based on evidence of sluggishness in the economy and in the pace of job growth, as well as the likelihood of more political uncertainty about the budget because of sharp differences between Democrats and Republicans.

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Former Fed Governor Kevin Warsh's views on the need for greater transparency and disclosure from the large U.S. banks and the risks to the financial system from "too-big-to-fail" banks in 2012-2013. He says the U.S. should not be dependent on the Basel standards for capital requirements and use its own system of stricter requirements similiar to the UK and Switzerland. His views are that the Dodd-Frank law puts too much dependence on regulators doing the right thing, information transparency is lacking for markets to impose discipline, and delegates too much to Basel standards which are not rigorous enough for protecting the U.S. economy.

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Warren Stephens, head of Stephens Inc, in Little Rock, Arkansas, says repeal of the Glass-Steagall Act was a mistake. U.S. banks should have a 5% cap on holdings of total deposits in the U.S., and no "grandfathering" of banks over the 5% limit. Five institutions controlling 50% of the deposits in the U.S. creates too much systemic risk in another financial crisis. Banks should be expected to be one or the other, commercial banks or investment banks, not both. These recommendations are not new. Bank of England Governor, Mervyn King, called for breaking up the largest banks or shrinking the size of the largest banks during the global financial crisis in 2008. This position for banks that are smaller in size is supported by veteran bankers Paul Volcker, Thomas Hoenig and other experts.

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Wall Street Journal analysis shows top earners at 38 U.S. banks and securities firms will get $145 billion in 2009, an 18% increase over 2008. This even after increasing public anger about exceedingly high levels of executive compensation with no relation to performance, and at a time of high unemployment.

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Guerrera describes the vital role that FDIC chairman Gruenberg's plan for unwinding failing financial institutions will play in tackling the "too-big-to-fail" problem facing the U.S. He points to the increasing importance of this after the failure of risk management systems at JP Morgan Chase bank.

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Morgenson says that the lobbying by the financial inudstry to weaken reform efforts for derivatives trading and resisting other reforms will only lead to taxpayers paying for more rescues later on.

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Krugman points out that the inflation adjusted wages of non-supervisory workers in the retail field in America has declined by 30% since 1973. He says there are no adverse effects on unemployment because workers in retail are not competing with workers in other countries as happens in manufacturing. They are also some of the lowest paid workers to begin with, and the numbers are not small. One estimate is that here are 30 million workers who would benefit from an increase in the minimum wage from the current level of $7.25 to $10.10. State by state comparisons provide proof of this as no evidence of losses in employment are to be seen when one state has raised the minimum wage and another neighboring state has not. Germany is facing a similiar problem of low paid temporary workers and a new coalition government is planning an increase in the minimum wage in 2014 as a response to increasing inequality and disparity in incomes developing in the last two decades.

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Risks to the economies of western Europe through the banking system and its lending to Eastern European economies are growing. The Easter European economies that are collapsing are Europe's version of the sub prime crisis in the USA. This may ricochet back to the United States as European institutional investors pull money out of the US stock market. Europan banks could suffer a further increase in nonperforming loans, and need further recapitalization from their governments, which are already hardpressed by demands for shoring up the social safey nets, stimulus spending and bank rescues. Big institutional investors in Western Europe, the banks, pension funds and insurance companies, hold large amounts of Eastern European debt, and further infusions of capital from western governments would put increasing pressure on the Euro.

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Total compensation and benefits at publicly traded Wall Street banks and securities firms was a record $135 billion in 2010, according to an analysis by the Wall Street Journal. This is up 5.7% from the $128 billion in 2009 for the same firms. The 25 largest financial firms saw revenues increase to $417 billion. Things are going back to where they were before the financial crisis with total compensation and benefits now exceeding the levels in 2007. In 2010 deferred compensation made up half of the total pay compared to being one third of total pay in prior years.

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Citigroup trades March 5, 2009, at intraday price of 97 cents. Its now in the penny stock region.

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The truth is very different from the rhetoric coming from the Obama administration about helping Main Street America and ordinary workers against "fat-cat bankers," says Goldfarb. Under the Obama administration banks have grown larger and gained more influence over administration decisions. No conditions were made part of the agreement that would require banks to lend a portion of the money handed out to the banks to ordinary borrowers. And not much of significance was done to help homeowners under water, which would enable a faster recovery. In this respect the policies slanted in favor of banks of the Obama administration worsened the prospects of an economic recovery. Experts from Reagan advisor Martin Feldstein- who as early as 2008 advocated serious help to homeowners under water to reduce principal and interest- to the FDIC's Sheila Bair and Princeton Prof. Krugman, across the ideological spectrum, perceived this being in the national interest. Feldstein's first op-ed on his plan appeared in the Wall Street Journal on 3/7/2008, followed by ones on 4/15/2008, 10/4/2008, 1/20/2010/ 10/12/2011 in WSJ, and a oped on 10/30/2008 in the Washington Post, repeating the call for siginificant debt reduction to homeowners. Banks had extraordinary influence on successive administrations in the U.S., both Republican and Democratic- the Clinton, Bush and Obama administrations- so that policy actions could be distorted from what would otherwise take place. A study by two University of Michigan professors shows that banks did not increase lending after receiving government money. Instead taxpayer money was used to invest in risky securities for profits from short term price movements, resulting in gains of about 10% in investment returns. Ran Duchin, one of the two professors, says helping ordinary borrowers was not the most profitable use of capital for banks. Without the necessary conditions from the Obama administration, the banks depolyed capital in ways that did not help the economy. Similiarly when banks needed to be restructured no preparatory action was taken because of resistance within the administration- a request by President Obama to Treasury Secretary Geithner for preparing a plan for the restructuring of Citigroup was ignored, according to a report by Goldfarb and Wallsten on 9/17/2011 in the Washington Post....

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Bond and derivative deals made between U.S. banks and Jefferson County in Alabama have resulted in steep losses and higher taxes to pay for the losses. Spencer Bachus represents Jefferson County in the U.S. Congress. He also received $7.1 million from financial companies, according to the Center for Responsive Politics. J.P. Morgan Chase which arranged the deal for Jefferson County, is also the largest contributor for the political campaign donations to Bachus.

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Faced with the prospects of severe hardship in poorer countries, the World Bank gives a realistic forecast for 2009 that shows the world economy shrinking in 2009. It says the neeeds of poorer countries are likely to overwhelm what the IMF and the World Bank can do. And called for seting up a"vulnerability fund". Even if the World Bank tripled its lending in 2009, it would only reach $35 billion. The combined gap the emerging market countries face it says, is at least $270 billion and upto $700 billion in the next 2 years.

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Serious doubts remain about the effectiveness of value at risk or VAR quant models used by JP Morgan Chase to measure potential losses on a trade on a bad day. A newer model used by Chase in the first quarter showed smaller losses. When the old model was run this trade showed double the losses according to Chase managers. Greenberger, a former CFTC official and a professor at the University of Maryland School of Law, says if the trade become hard to unwind it shows poor risk management. And experts say it is not much of a hedge if it is done in an obscure part of credit markets and hard to unwind without serious losses. Peter Tchir, a former head of index trading at RBS bank, says CEO Dimon must have seen these kinds of hedges as part of his overall strategy, which is why he supported them in April 2012. The problem lies in that the bank size has grown to such proportions that its simply too big to manage, with trades it has to make becoming massive as a consequence.