Coppola Comment

Scott Sumner has been reading Piketty . And in the first of (apparently) several posts he picks Piketty apart, starting with this passage: "In my view, there is absolutely no doubt that the increase of inequality in United States contributed to the nation’s financial instability. The reason is simple: one consequence of increasing inequality was virtual stagnation of the purchasing power of the lower and middle classes in the United States, which inevitably made it more likely that modest households would take on debt, especially since unscrupulous banks and financial intermediaries, freed from regulation and eager to earn good yields on the enormous savings injected into the system by the well-to-do, offered credit on increasingly generous terms." "Where does one begin?" cries Sumner. And he then proceeds to give five reasons why this particular passage is wrong: "1.  In my view there is plenty of doubt as to whether inequality contributed to the crisis...

US regulators are about to throw the book at the French bank BNP Paribas: BNP Paribas is facing a potential fine of up to $10bn for breaking sanctions imposed by the US government on Iran. This would be by far the largest fine ever imposed on a bank by US regulators for sanctions-breaking, and one of the largest regulatory fines in history. BNP is by no means the first bank to be fined by the US for sanctions-breaking.... Indeed it is not. The list is long and expensive. But BNP's penalty is an order of magnitude greater than any other bank's, and it faces other penalties too. French politicians are none too happy about this, and European central bankers and regulators are concerned. Is this fine really such a good idea? Read the whole post on Forbes .