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The $2 billion losses at Chase highlights the need for completing the Volcker Rule with language that prevents banks engaging in risky trading activities. Former FDIC chairman Sheila Bair says precise language is needed to clarify the defiinition of hedging after the losses by a single trader's complex hedging bet in London. Individual traders have too much authority in existing trading arrangements to make complicated bets in finanial markets. Large losses were incurred by Swiss bank UBS when an individual trader in London made risky bets in 2011, raising all sorts of questions about the bank's risk management systems.

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Wal-Mart has removed same store sales as a metric on which managers and executives are measured for performance based compensation. As a result CEO Duke sees his compensation increase in the last fiscal year from what it would be under the previous arrangement. Same store sales have declined for seven consecutive quarters at Wal-Mart. The new metric used instead of same store sales is total sales, which increased 3.4% in the last fiscal year. Duke's compensation was $18.7 million, of which $16 million was performance based, for the last fiscal year. Morgenson asks if Wal-Mart executives are being opportunistic when it comes to setting the metrics for performance based compensation.

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Krugman puts it best when he says in the NYT that he's got a sick feeling in the pit of his stomach. Its just that the Republican challenge of not a single vote in the House for the $789 billion Stimulus bill just makes it harder to go back for more money which most definitely will be needed. The Congressional Budget Office predicts that over the next 3 years there will be a $2.9 trillion gap between what the economy could produce and will actually produce. $789 billion won't be enough, and more so because the weightage shifted in the direction of tax cuts from the original version. And considering the accelerating nature of the crisis on the housing front and in layoffs and consumption, the absence of a clear action plan with specifics to deal with the bad debt in the banking system, is what gives this sick feeling in the stomach. Because as is stated on these same pages by experts from Japan on February 12, NYT, see the link, Japan went through this same soul searching, public anger, controversy, and political leaders were afraid to take strong action for years from the mid 1990's till 2003 after Koizumi's election. Each action or set of actions each year during that period before 2003 was behind the curve, and did not match what was needed. For the USA this has happened already for 2007, 2008 and is heading in that direction for 2009, with a lack of consensus for the strong action needed. Would 4 million new jobs be generated by the current stimulus if that is a measure of success, as Obama indicated at his first press conference? With less going into spending for education, infrastructure, energy and other green projects, in favor of tax cuts and the AMT, and the feeling that going to Congress for more money will be harder and a partisan affair, will this become difficult to achieve? ...

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AIG and GE Capital are designated "systemically important" financial institutions by the U.S. Treasury in 2013.

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Before taking up the job of enforcement chief at the SEC, Robert Khuzami spent five years running the U.S. legal division of Deutsche Bank. In that job he worked with lawyers who advised on the collaterized debt obligations issued by the bank, and the details to be disclosed to investors. Like Goldman, Deutsche Bank has faced alllegations of not disclosing the proper information for its CDO's. Before joining Deutsche Bank, Khuzami was a prosecutor in the U.S. attorney's office in Manhattan for 11 years.

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Parallels between the Taft, Theodore Roosevelt and Woodrow Wilson election campaigns of 1910 and 1912, and the campaigns of 2010 and 2012, drawn by a T.R. biographer. He points to a tumultuous period ahead as lobbyists, outside interests, and the political parties and their supporters battle it out to set the direction of the country.

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Lack of individual accountability has been a defining feature of large U.S. Justice Department legal settlements with banks and other corporate entities since 2009. This WSJ editorial says establishing individual accountability where wrongdoing has happened is something it has consistently called for since 2009, especially as establishing this would reduce the unnecessary burden imposed on shareholders and employees who may have had nothing do to with the wrongdoing.

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Krugman points to some striking data in a U.S. Federal Reserve study, showing 47% of Americans do not have the money to meet an unexpected expense of $400 without selling something they own or borrowing. The is the 2nd year of this Federal Reserve study. It shows alarming information about the condition of retirement savings- about 30% of nonelderly Americans say they have no retirement savings or pension, and reported going without some kind of medical care because they could not handle the expense. About 25% say they or a family member experienced financial hardship this year.

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Richard Fisher, president of the Dallas Federal Reserve Bank, has a three part proposal for tackling the "too big to fail" problem and concentration of 70% of the U.S. banking assets in a few banks. It calls for Market Discipline to be exercized in a way that the Dodd-Frank legislation fails to do. This is to be accomplished by having deposit insurance and the Fed's discount window apply only to traditional commercial banks, not the nonbank affiliates and parent holding companies. Customers, creditors and counterparties of all nonbank affiliates and the parent holding companies would be asked to sign a disclosure accepting that there is no government guarantee. In addition the largest financial holding companies would be restructured so that all their corporate entities would fall under a speedy bankruptcy process. Fisher does not clarify how he would do this restructuring. The Fisher idea come after changes in the banking industry through internal management restructuring following trading losses, legal settlements and the passage of a Swiss referendum called the Minder Initiative on compensation. Fisher suggests the U.S. Fed and regulatory authorites in other countries should push for further restructuring and calls for action beyond the limited results from 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. He is critical of Dodd-Frank's often ambiguous and lengthy worded legislation- 849 pages for the law and 9000 pages for the regulations written to implement the law. Fisher emphasizes the point that its hard to implement a law and enforce rules when its not clear and is difficult to understand....