Guide to the FDR Framework

For new readers of this blog, your humble blogger would like to suggest the following posts as they provide the intellectual foundation to the the FDR Framework.

The FDR Framework recognizes that our capital markets reflect a philosophy of disclosure combined with the principle of caveat emptor [buyer beware].  For the capital markets to function properly, each must be present:

• Governments are responsible for insuring that investors have access to all the useful, relevant information in an appropriate, timely manner and not endorsing a specific investment.

• Investors are responsible for doing their own homework prior to investing and so long as they hold the investment.  This is known as trust, but verify.

With the ability to do their own homework, investors accept their losses knowing that investing is not risk-free and do not look to be bailed-out of their losses.

FDR Framework
The FDR Framework:  The Cure for Wall Street's Organizing Principle of Secrecy
Bank of England FPC Member Donald Kohn's call for greater transparency to enhance financial stability

Bank Capital and Bank Runs

Bank runs and the FDR Framework
FDR Framework has Passed the Test of Time
FDR Framework:  cure for complexity, concentration and contagion

With Ability to do Homework, Comes Investor Willingness to Accept Losses

Cost/Benefit Analysis of Providing Current Asset-Level Data Under FDR Framework

FDR Framework:  Combines Regulatory Oversight and Market Discipline
FDR Framework provides new model for bank supervision
FDR Framework puts capital requirements into perspective

Obama Embraces 21st Century Regulatory System

Warren Buffett, Michael Lewis and the Volcker Rule

Economists Call for More Bank Reform

Economist Magazine Champions the Creation of the 'Mother of All Databases'

Jamie Dimon, Gary Cohen, Peter Sands Need and Want Current Asset-Level Data
Controlling Contagion:  Banks can avoid Firms with Too Much Risk

Gambling by Financial Regulators puts Financial System at Risk
Regulators are a Source and Perpetuator of Financial Instability
Restructuring banking system does not solve problems caused by regulators' information monopoly
Extend and Pretend Policies Perpetuate Financial Instability
Stress Tests and Too Big to Fail
Regulatory Black Swans

The FDR Framework and Disclosure of Discount Window Borrowing
The FDR Framework and Credit Ratings
The FDR Framework Reduces Reliance on Regulators as Risk Managers

Saving the Efficient Market Hypothesis and Rational Expectations
FDR Framework Debunks Informationally-Insensitive Debt Concept

Impact of Current Asset-Level Disclosure on Too Big to Fail and Bank Bonuses

Finally, there is The Brown Paper Bag Challenge.  This challenge uses a physical model to show why disclosure of asset-level data on an observable event basis is needed for both structured finance securities and financial institutions.