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The Megabanks Mess (Kindle Single) [Kindle Edition]

Herbert M. Allison
3.6 out of 5 stars  See all reviews (14 customer reviews)

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Kindle Singles
Kindle Singles
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Book Description

Herb Allison builds a powerful case for breaking up the megabanks and overhauling regulation and oversight of the financial industry so that the public interest can prevail over the self-interest of bankers...and another financial crisis can be avoided.

Allison draws upon his own exceptionally broad experience in the financial industry to cut through the outrage and finger pointing at America’s largest banks for their roles in the financial crisis, and reveal why those institutions have become addicted to risk, how their deep-seated conflicts of interest harm the public and, most importantly, what should be done now to reform them.

During Allison’s 40-year career, he has managed the investment banking and trading divisions and then served as president of Merrill Lynch in the 1990s; led TIAA-CREF, one of America’s most respected investment companies, from 2002-2008; assumed leadership of Fannie Mae at the request of Treasury Secretary Paulson when that company was placed into conservatorship during the mortgage crisis; and directed the Troubled Asset Relief Program (TARP) as Assistant Secretary of the Treasury for Financial Stability in the Obama Administration. He also coordinated the group of banks that bailed out Long Term Capital Management in 1998.

Readers of The Megabanks Mess can discuss the book on Twitter: @bankmess




Editorial Reviews

Amazon.com Review

In late 2008, every major American bank would have failed if not for the assistance of the federal government. And yet today banks still act with the same single-minded pursuit of profit that fueled the great recession. In this Kindle Single, Herbert Allison, former president of a Wall Street investment bank, reveals how America’s largest banks put their own interests above their client’s interest, how they quietly siphon half of an individual’s long-term savings, how they mine client information and convert it into profits through trading and advising activities, and how their business models periodically jeopardize their own survival while imposing huge losses on clients, shareholders, and the public. Allison also offers an 11-point plan to fix our banks. His common-sense solutions are sure to enrage bank leaders, while his exposure of bank business practices may leave readers with a certain disdain for megabanks. --Paul Diamond

Product Details

  • File Size: 328 KB
  • Print Length: 48 pages
  • Language: English
  • ASIN: B0051GQX1I
  • Text-to-Speech: Enabled
  • X-Ray:
  • Lending: Not Enabled
  • Amazon Best Sellers Rank: #391,832 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Customer Reviews

Most Helpful Customer Reviews
13 of 14 people found the following review helpful
Verified Purchase
The author presents how the current banking system has evolved into the `too-big-to-fail' system, how that is a problem that STILL needs fixing, and his view on what needs to be done.

His essay is very suited to the Amazon `single' format (at around 1100 Kindle locations)--the author was able to give background information, describe the problem as he sees it, and give opinions on how to fix the problems--but does not go into the specifics of detailed fixes--as that would be way beyond a 'single'.

He starts with a review of the evolution of the financial/banking industry from the 1970s onward, including pressures that arose from stagflation and the changes due to deregulation--going through the repeal of the Glass-Stegall act and the eventual expansion of financial firms outside previously delineated limits.

He also reviews some of the other pressures resulting in the subsequent`mess', including the flaws inherent in the new system with it's focus on short term measures and profits, ever evolving complexity, and without necessarily considering the fiduciary duty to the clients of the new fiscal giants.

The author also discusses the flaws inherent in the current governance of the so-called megabanks and/or financial services industry including a loss of oversight by ineffective, uninvolved or conflict of interest laden Board of Directors.

He moves on to describe how the industry itself could change, however he rapidly discounts the industry's willingness or ability to do so.

The author then moves on to how government may/should need to step in.
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7 of 7 people found the following review helpful
5.0 out of 5 stars megabank reform June 2, 2011
By dodd
Verified Purchase
This book offers remarkable insight into the development, that is, the over-development, of the financial services industry in the post-war period, to the point where there is more megabank risk that can be managed. In a clear and straightforward presentation, Allison, a former top executive of investment bank Merrill Lynch, states his case for radical change, and for a return to the time before the repeal of Glass-Steagall, prescribing much higher levels of accountability and realigned incentive systems less in favor of top executives and bank boards. Some would argue that the governance of large financial institutions has been hijacked by an insular few, and that bank cultures have been corrupted over time. He seems to agree. He also argues that the size of the megabanks offers a false sense of security and strength, and that the assets have grown complex beyond imagination and dangerously mismatched with liabilities, and that successful management of such complex institutions under current goverance is nearly impossible (the unforgettable instance of CEO Charlie Prince wanting to dance until the music stops, is cited). He outlines new business models for retail and capital markets, and sets forth eleven specific proposals for transforming the megabanks. His keen insight and direct call to action are worth taking seriously not only because they seem so full of common sense, but also because of his long and broad experience in the securities field, investment banking, money management, and government regulation and finance. In my view, his recommendation that corporate control be shifted back towards shareholders, whereby they can much more easily challenge existing governance, and more readily propose and elect slates of directors to serve independently of top management, hits the bullseye. It is a fine day in America when a corporate veteran stands up for a seachange in our financial system. This book should be required reading in Washington, D.C.
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5 of 5 people found the following review helpful
5.0 out of 5 stars blank June 2, 2011
By blank
Mr. Allison's writing style is terrific. He was able to write with an incredible grasp of history and facts the lay person (or even seasoned financial services professional) may not be fully aware of, yet do so in such an understandable and easy to read fashion. The reader can quickly understand how the "mess" unfolded. More importantly, those within the financial services industry should take away from his work how losing sight of serving clients as a first priority can ripple into results with such a profound impact on an industry central to our national economy and stability.

The material on corporate governance should be a wake-up call for boards in the financial industry and others. While pointedly relevant for board members and executives of financial services firms, the material should also be read by every finance or business student - and would make a great foundation for student case studies or industry corrective action plans as a part of their course work. As Mr. Allison indicates in the outset of the material, one hopes this serves to stimulate dialogue on this important subject in the corridors of the largest financial services firms, in Congress and among the press.
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1 of 1 people found the following review helpful
5.0 out of 5 stars An Excelent Review and Sound Proposal for Change. November 22, 2012
Verified Purchase
As a one time bank executive I read this book with interest. In my opinion the bank executives acted without prudence and against all sound lending principles. The excuse that everybody else was doing it and we will miss the bus does not stack up in the court of ethics. true as the author argues Bank Boards were remiss in not understanding let alone controlling what was going on and the world suffered the consequences, some people in some countries far worse than in the USof A. I am only glad that our bank regulatory authorities do not permit our Australian Banks to engage in such reckless activities. It was a sad day when President Clinton withdrew similar prudential controls over US banks.
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Most Recent Customer Reviews
4.0 out of 5 stars but even a somewhat cursory review of a couple of the items has...
All of the purchases listed above have been up to my expectations. Some have not been totally evaluated due to the
other demands on my time; but even a somewhat cursory review... Read more
Published 1 month ago by Emannert Nepper
4.0 out of 5 stars Four Stars
Great analysis but will never happen.
Published 1 month ago by xxxxx
4.0 out of 5 stars Copy of This Available Somewhere?
I've searched the web high and low for a copy of this and can't find anything??? I'd sure appreciate it if someone could sell, loan, give, share or whatever this eBook/document to... Read more
Published 19 months ago by T. Zehrer
5.0 out of 5 stars excellent summary of the problems in banking
This summary of contemporary banking practices and problems provides necessary insider knowledge into how the latest economic disaster was produced by those practices and gives... Read more
Published on March 13, 2012 by Kirk Hughey
1.0 out of 5 stars Terrible -surprisingly so given the author's resume
On paper, Herbert Allison would seem to have been a perfect person to expose the problems in the banking industry that precipitated the financial crisis. Read more
Published on January 1, 2012 by Amazon Customer
1.0 out of 5 stars Wholly derivative, with unimaginative policy prescriptions
Instead of providing any fresh insights on the causes of the financial crisis, Herbert Allison offers a children's narrative filled with now-familiar villains: the banks,... Read more
Published on August 9, 2011 by Sagar Jethani
3.0 out of 5 stars What Does "Using Approved Models of Risk" Mean?
This author wants to jettison the Volcker Rule for the concept of "Using approved models of risk". Well, who approves the models? The banks? Pretty funny really. Read more
Published on July 10, 2011 by Gary Anderson
3.0 out of 5 stars Not for the layman
I might have given this book 4 or even 5 stars but I found it a difficult read and hard to follow. Several times I had to stop to re-read what I had just read to understand what he... Read more
Published on June 26, 2011 by Gennaphyr
2.0 out of 5 stars Too general
This essay is a disappointment. Given the impressive resume of its author, I had expected a more detailed and insightful analysis of the banking problem. Read more
Published on June 23, 2011 by Amazon Customer
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