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...firms leading the charge to capital-light banking was Bank of America (BofA). Starting in 1993, a predecessor firm became one of the first banks to develop and embrace computer models that were supposed to improve a bank's ability to determine the risk of a particular type of loan. After a merger in 1998 that formed the bank, BofA officials often argued to investors and regulators that these new advanced risk controls meant the bank needed to carry less capital per loan. The officials also frequently fought regulations that would boost capital requirements for them and other banks...

Author: /time Magazine | Title: Why Your Bank Is Broke | 1/31/2009 | See Source »

...operations has only made matters worse. For deposit-based loans, the banks have wide discretion as to when they record a loss. Some do it after a borrower misses his first payment. Other banks wait until the loan is 120 days past due. But for loans made through a firm's investment-banking division, the bank has to reduce the value of those debts according to what similar pools of loans are worth. This is known as mark-to-market accounting. And when investors grow increasingly nervous that borrowers will not pay back their debts, as they...

Author: /time Magazine | Title: Why Your Bank Is Broke | 1/31/2009 | See Source »

...assuming Bruni holds on to her Italian passport, she may want to look for an Italian PR firm...

Author: /time Magazine | Title: France's First Lady Carla Bruni: A Traitor to Italy? | 1/30/2009 | See Source »

...driven our recent financial history. "His solutions tend to be government-led, progressive structuring of the market for what he perceives as the greater social good," explains the new Treasury Secretary, Timothy Geithner, who was an Under Secretary for Summers during the Clinton Administration. "But he is also a firm believer in letting market forces lead...

Author: /time Magazine | Title: Can Larry Summers Save the Economy? | 1/29/2009 | See Source »

Victor Jih, a 35-year-old partner at the Los Angeles-based law firm O’Melveny & Myers LLP, said he has been interested in The Amazing Race since its first season. In a previous round, he applied with a O’Melveny colleague and was turned down as a contestant...

Author: By Eric P. Newcomer, CRIMSON STAFF WRITER | Title: HLS Alums Race Around The World | 1/29/2009 | See Source »

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